Barbarian At The Gate: Keryx Biopharmaceuticals (KERX)

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 Keryx Biopharmaceuticals ( KERX) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Keryx Biopharmaceuticals as such a stock due to the following factors:

  • KERX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $27.4 million.
  • KERX has traded 2.0 million shares today.
  • KERX traded in a range 202.6% of the normal price range with a price range of $1.12.
  • KERX traded above its daily resistance level (quality: 143 days, meaning that the stock is crossing a resistance level set by the last 143 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on KERX:

Keryx Biopharmaceuticals, Inc., a biopharmaceutical company, focuses on the acquisition, development, and commercialization of pharmaceutical products for the treatment of renal disease in the United States. Currently there are 7 analysts that rate Keryx Biopharmaceuticals a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Keryx Biopharmaceuticals has been 1.4 million shares per day over the past 30 days. Keryx has a market cap of $1.4 billion and is part of the health care sector and drugs industry. The stock has a beta of 4.16 and a short float of 22% with 13.16 days to cover. Shares are up 22.7% 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 Keryx Biopharmaceuticals 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, disappointing return on equity, weak operating cash flow and poor profit margins.

Highlights from the ratings report include:
  • KERYX BIOPHARMACEUTICALS 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, KERYX BIOPHARMACEUTICALS INC reported poor results of -$0.57 versus -$0.36 in the prior year. For the next year, the market is expecting a contraction of 55.3% in earnings (-$0.89 versus -$0.57).
  • 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 97.3% when compared to the same quarter one year ago, falling from -$11.36 million to -$22.41 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Biotechnology industry and the overall market, KERYX BIOPHARMACEUTICALS 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 -$17.57 million or 140.96% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The gross profit margin for KERYX BIOPHARMACEUTICALS INC is currently extremely low, coming in at 0.00%. KERX has continued with the weak profit margin when compared to the same quarter of last year.

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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