Cerus (CERS) Highlighted As Today's Perilous Reversal 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 Cerus ( CERS) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Cerus as such a stock due to the following factors:

  • CERS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $18.7 million.
  • CERS has traded 195,358 shares today.
  • CERS is down 3.2% today.
  • CERS was up 5.6% yesterday.

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More details on CERS:

Cerus Corporation, together with its subsidiary, Cerus Europe B.V., operates as a biomedical products company in Europe, the Commonwealth of Independent States, and the Middle East. The company develops and commercializes the INTERCEPT Blood System to enhance blood safety. Currently there are 3 analysts that rate Cerus a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Cerus has been 1.2 million shares per day over the past 30 days. Cerus has a market cap of $482.1 million and is part of the health care sector and drugs industry. The stock has a beta of 2.68 and a short float of 19.2% with 4.24 days to cover. Shares are down 0.6% 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 Cerus as a sell. Among the areas we feel are negative, one of the most important has been weak operating cash flow.

Highlights from the ratings report include:
  • Net operating cash flow has significantly decreased to -$11.74 million or 92.72% 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'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 Health Care Equipment & Supplies industry and the overall market, CERUS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • In its most recent trading session, CERS has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • CERS, with its decline in revenue, slightly underperformed the industry average of 7.2%. Since the same quarter one year prior, revenues slightly dropped by 1.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • CERUS CORP has improved earnings per share by 44.8% 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, CERUS CORP reported poor results of -$0.64 versus -$0.36 in the prior year. This year, the market expects an improvement in earnings (-$0.59 versus -$0.64).

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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