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 Theravance (THRX) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Theravance as such a stock due to the following factors:
- THRX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $18.8 million.
- THRX has traded 385,109 shares today.
- THRX is up 4.6% today.
- THRX was down 19.4% yesterday not including the $5.60 cash equivalent distribution in the form of a spin-off stock of Theravance Biopharma (TBPH). Including the spin-off the shares rose 0.2%.
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More details on THRX:
Theravance, Inc., a biopharmaceutical company, is engaged in the discovery, development, and commercialization of small molecule medicines primarily for therapeutic areas of respiratory diseases, bacterial infections, and central nervous system/pain. Currently there are 4 analysts that rate Theravance a buy, 1 analyst rates it a sell, and 1 rates it a hold.
The average volume for Theravance has been 988,100 shares per day over the past 30 days. Theravance has a market cap of $3.2 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.63 and a short float of 44% with 25.72 days to cover.
TheStreet Quant Ratings rates Theravance as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, weak operating cash flow, generally disappointing historical performance in the stock itself and generally high debt management risk.
Highlights from the ratings report include:
- THERAVANCE 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, THERAVANCE INC reported poor results of -$1.66 versus -$0.19 in the prior year. For the next year, the market is expecting a contraction of 0.6% in earnings (-$1.67 versus -$1.66).
- 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 81.2% when compared to the same quarter one year ago, falling from -$37.36 million to -$67.70 million.
- Net operating cash flow has significantly decreased to -$50.64 million or 60.08% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The debt-to-equity ratio of 1.09 is relatively high when compared with the industry average, suggesting a need for better debt level management. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 8.42, which shows the ability to cover short-term cash needs.
- You can view the full Theravance Ratings Report.