Perilous Reversal Watch: Amicus Therapeutics (FOLD)

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

  • FOLD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $44.1 million.
  • FOLD has traded 249,815 shares today.
  • FOLD is down 3.1% today.
  • FOLD was up 10.3% yesterday.

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More details on FOLD:

Amicus Therapeutics, Inc., a biopharmaceutical company, focuses on the discovery, development, and commercialization of medicines for various rare and orphan diseases. Currently there are 3 analysts that rate Amicus Therapeutics a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Amicus Therapeutics has been 2.5 million shares per day over the past 30 days. Amicus has a market cap of $473.0 million and is part of the health care sector and drugs industry. The stock has a beta of 1.76 and a short float of 8.1% with 0.16 days to cover. Shares are up 163.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Amicus Therapeutics 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 decreased to -$11.82 million or 15.18% 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 company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Biotechnology industry average, but is greater than that of the S&P 500. The net income increased by 4.8% when compared to the same quarter one year prior, going from -$15.35 million to -$14.61 million.
  • AMICUS THERAPEUTICS INC has improved earnings per share by 29.0% 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, AMICUS THERAPEUTICS INC reported poor results of -$1.17 versus -$1.09 in the prior year. This year, the market expects an improvement in earnings (-$0.94 versus -$1.17).
  • This stock has increased by 103.38% 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 FOLD do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

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