Pharmacyclics (PCYC) Is Water-Logged And Getting Wetter Today

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 Pharmacyclics ( PCYC) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Pharmacyclics as such a stock due to the following factors:

  • PCYC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $101.3 million.
  • PCYC has traded 622,127 shares today.
  • PCYC traded in a range 270.3% of the normal price range with a price range of $12.16.
  • PCYC traded below its daily resistance level (quality: 59 days, meaning that the stock is crossing a resistance level set by the last 59 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on PCYC:

Pharmacyclics, Inc., a biopharmaceutical company, designs, develops, and commercializes small-molecule drugs for the treatment of cancer and immune mediated diseases in the United States and internationally. PCYC has a PE ratio of 119.0. Currently there are 10 analysts that rate Pharmacyclics a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Pharmacyclics has been 713,900 shares per day over the past 30 days. Pharmacyclics has a market cap of $10.1 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.43 and a short float of 10.5% with 5.60 days to cover. Shares are up 24.3% 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 Pharmacyclics as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • PCYC's very impressive revenue growth greatly exceeded the industry average of 40.9%. Since the same quarter one year prior, revenues leaped by 161.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • PCYC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 5.50, which clearly demonstrates the ability to cover short-term cash needs.
  • PHARMACYCLICS INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, PHARMACYCLICS INC reported lower earnings of $0.80 versus $1.15 in the prior year. This year, the market expects an improvement in earnings ($0.89 versus $0.80).
  • Net operating cash flow has declined marginally to $45.56 million or 0.63% 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 change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Biotechnology industry average. The net income has decreased by 2.1% when compared to the same quarter one year ago, dropping from $42.33 million to $41.42 million.

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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