Idera Pharmaceuticals (IDRA) Marked As A Dead Cat Bounce Stock

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 Idera Pharmaceuticals ( IDRA) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Idera Pharmaceuticals as such a stock due to the following factors:

  • IDRA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.0 million.
  • IDRA has traded 57,606 shares today.
  • IDRA is up 3.1% today.
  • IDRA was down 9.9% yesterday.

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More details on IDRA:

Idera Pharmaceuticals, Inc., a clinical stage biotechnology company, is engaged in the discovery and development of novel therapeutics that modulate immune responses through toll-like receptors (TLRs) in the United States. Currently there are 2 analysts that rate Idera Pharmaceuticals a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Idera Pharmaceuticals has been 1.2 million shares per day over the past 30 days. Idera has a market cap of $332.1 million and is part of the health care sector and drugs industry. The stock has a beta of 3.18 and a short float of 12.4% with 1.96 days to cover. Shares are down 17.1% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Idera Pharmaceuticals as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • 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 99.5% when compared to the same quarter one year ago, falling from -$4.74 million to -$9.46 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, IDERA PHARMACEUTICALS 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 -$8.05 million or 72.47% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • IDERA PHARMACEUTICALS INC reported flat earnings per share in the most recent quarter. 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, IDERA PHARMACEUTICALS INC continued to lose money by earning -$0.51 versus -$0.81 in the prior year. This year, the market expects an improvement in earnings (-$0.45 versus -$0.51).
  • Compared to its closing price of one year ago, IDRA's share price has jumped by 41.75%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in IDRA do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

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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