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

  • GALE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $18.9 million.
  • GALE has traded 165,355 shares today.
  • GALE is down 3.3% today.
  • GALE was up 6.6% yesterday.

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More details on GALE:

Galena Biopharma, Inc., a biopharmaceutical company, focuses on developing and commercializing oncology treatments that address major unmet medical needs to advance cancer care. Currently there are 5 analysts that rate Galena Biopharma a buy, 1 analyst rates it a sell, and none rate it a hold.

The average volume for Galena Biopharma has been 3.8 million shares per day over the past 30 days. Galena has a market cap of $337.6 million and is part of the health care sector and drugs industry. The stock has a beta of 1.05 and a short float of 22.2% with 4.06 days to cover. Shares are down 38.5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Galena Biopharma as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has significantly decreased to -$8.05 million or 50.96% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • GALENA BIOPHARMA INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GALENA BIOPHARMA INC reported poor results of -$0.79 versus -$0.62 in the prior year. This year, the market expects an improvement in earnings (-$0.30 versus -$0.79).
  • The gross profit margin for GALENA BIOPHARMA INC is currently very high, coming in at 91.26%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -116.70% is in-line with the industry average.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Biotechnology industry. The net income increased by 72.7% when compared to the same quarter one year prior, rising from -$9.29 million to -$2.54 million.

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