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

  • FLML has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.2 million.
  • FLML has traded 135,640 shares today.
  • FLML is up 3% today.
  • FLML was down 37.7% yesterday.

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More details on FLML:

Flamel Technologies SA, a specialty pharmaceutical company, develops and commercializes pharmaceutical products based on its proprietary polymer based technology. Currently there are 4 analysts that rate Flamel Technologies a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Flamel Technologies has been 312,500 shares per day over the past 30 days. Flamel has a market cap of $709.8 million and is part of the health care sector and drugs industry. Shares are up 7.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Flamel Technologies as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, feeble growth in its earnings per share and generally high debt management risk.

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 Pharmaceuticals industry. The net income has significantly decreased by 57.7% when compared to the same quarter one year ago, falling from -$6.37 million to -$10.05 million.
  • FLAMEL TECHNOLOGIES SA -ADR' earnings per share from the most recent quarter came in slightly below the year earlier quarter. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, FLAMEL TECHNOLOGIES SA -ADR reported poor results of -$1.69 versus -$0.14 in the prior year. For the next year, the market is expecting a contraction of 8.3% in earnings (-$1.83 versus -$1.69).
  • The debt-to-equity ratio is very high at 2.40 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, FLML has managed to keep a strong quick ratio of 1.87, which demonstrates the ability to cover short-term cash needs.
  • Compared to other companies in the Pharmaceuticals industry and the overall market, FLAMEL TECHNOLOGIES SA -ADR's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for FLAMEL TECHNOLOGIES SA -ADR is currently very high, coming in at 79.74%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -142.92% is in-line with the industry average.

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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