Today's Perilous Reversal Stock: Myriad Genetics (MYGN)

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

  • MYGN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $33.8 million.
  • MYGN has traded 113,459 shares today.
  • MYGN is down 3.1% today.
  • MYGN was up 6.2% yesterday.

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More details on MYGN:

Myriad Genetics, Inc., a molecular diagnostic company, focuses on the development and marketing of predictive medicine, personalized medicine, and prognostic medicine tests primarily in the United States. MYGN has a PE ratio of 15.9. Currently there are 4 analysts that rate Myriad Genetics a buy, 2 analysts rate it a sell, and 8 rate it a hold.

The average volume for Myriad Genetics has been 1.2 million shares per day over the past 30 days. Myriad has a market cap of $2.8 billion and is part of the services sector and diversified services industry. The stock has a beta of 0.93 and a short float of 54% with 44.17 days to cover. Shares are up 92.6% year-to-date as of the close of trading on Monday.

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 Myriad Genetics as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 26.8%. Since the same quarter one year prior, revenues rose by 16.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • MYGN has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.13, which clearly demonstrates the ability to cover short-term cash needs.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Biotechnology industry and the overall market, MYRIAD GENETICS INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

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