Perilous Reversal Stock: Isis Pharmaceuticals (ISIS)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Isis Pharmaceuticals ( ISIS) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Isis Pharmaceuticals as such a stock due to the following factors:

  • ISIS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $104.5 million.
  • ISIS has traded 1.2 million shares today.
  • ISIS is down 3% today.
  • ISIS was up 9.2% yesterday.

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More details on ISIS:

Isis Pharmaceuticals, Inc. is engaged in the discovery and development of antisense drugs using novel drug discovery platform. Currently there are 5 analysts that rate Isis Pharmaceuticals a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Isis Pharmaceuticals has been 2.6 million shares per day over the past 30 days. Isis has a market cap of $3.3 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.64 and a short float of 11.6% with 3.59 days to cover. Shares are down 30.2% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Isis Pharmaceuticals as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Biotechnology industry. The net income has significantly decreased by 1770.8% when compared to the same quarter one year ago, falling from -$1.67 million to -$31.28 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Biotechnology industry and the overall market, ISIS PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$32.33 million or 205.67% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • ISIS PHARMACEUTICALS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ISIS PHARMACEUTICALS INC continued to lose money by earning -$0.53 versus -$0.65 in the prior year. For the next year, the market is expecting a contraction of 31.1% in earnings (-$0.70 versus -$0.53).
  • The revenue fell significantly faster than the industry average of 26.2%. Since the same quarter one year prior, revenues fell by 35.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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