Today's Perilous Reversal Stock: Dyax (DYAX)

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

  • DYAX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.8 million.
  • DYAX has traded 239,983 shares today.
  • DYAX is down 3% today.
  • DYAX was up 12.5% yesterday.

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More details on DYAX:

Dyax Corp., a biopharmaceutical company, identifies, develops, and commercializes treatments for hereditary angioedema (HAE) and plasma kallikrein-mediated (PKM) angioedemas. The company offers KALBITOR for the treatment of acute attacks of HAE. Currently there are 5 analysts that rate Dyax a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Dyax has been 1.5 million shares per day over the past 30 days. Dyax has a market cap of $1.2 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.13 and a short float of 7.2% with 4.67 days to cover. Shares are up 32.2% year-to-date as of the close of trading on Friday.

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

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Dyax as a sell. The area that we feel has been the company's primary weakness has been its generally higher debt management risk.

Highlights from the ratings report include:
  • DYAX's debt-to-equity ratio of 0.80 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 12.97 is very high and demonstrates very strong liquidity.
  • Compared to other companies in the Biotechnology industry and the overall market, DYAX CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to -$5.62 million or 26.40% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 14.84%.
  • This stock has increased by 174.84% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in DYAX do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
  • DYAX CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, DYAX CORP continued to lose money by earning -$0.27 versus -$0.29 in the prior year. This year, the market expects an improvement in earnings (-$0.20 versus -$0.27).

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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