Today's Perilous Reversal Stock: Aegerion Pharmaceuticals (AEGR)

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

  • AEGR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $32.1 million.
  • AEGR has traded 98,585 shares today.
  • AEGR is down 3% today.
  • AEGR was up 5.1% yesterday.

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More details on AEGR:

Aegerion Pharmaceuticals, Inc., a biopharmaceutical company, develops and commercializes therapies for patients with debilitating rare diseases in the United States. Currently there are 7 analysts that rate Aegerion Pharmaceuticals a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Aegerion Pharmaceuticals has been 1.0 million shares per day over the past 30 days. Aegerion has a market cap of $915.1 million and is part of the health care sector and drugs industry. The stock has a beta of 0.46 and a short float of 34.4% with 8.01 days to cover. Shares are down 54.1% year-to-date as of the close of trading on Wednesday.

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 Aegerion Pharmaceuticals as a sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • AEGR's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 65.63%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • 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 49.1% when compared to the same quarter one year prior, rising from -$18.90 million to -$9.62 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, AEGERION PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for AEGERION PHARMACEUTICALS INC is currently very high, coming in at 88.45%. Regardless of AEGR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AEGR's net profit margin of -26.71% significantly underperformed when compared to the industry average.
  • AEGR's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 4.87, which clearly demonstrates the ability to cover short-term cash needs.

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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