Momenta Pharmaceuticals (MNTA) 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.

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

  • MNTA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $28.3 million.
  • MNTA has traded 59,213 shares today.
  • MNTA is up 7.3% today.
  • MNTA was down 5.2% yesterday.

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More details on MNTA:

Momenta Pharmaceuticals, Inc., a biotechnology company, focuses on developing generic versions of complex drugs, biosimilars, and novel therapeutics for oncology and autoimmune diseases. Currently there are 4 analysts that rate Momenta Pharmaceuticals a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Momenta Pharmaceuticals has been 945,900 shares per day over the past 30 days. Momenta has a market cap of $1.1 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.85 and a short float of 14.2% with 4.49 days to cover. Shares are up 52.9% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Momenta Pharmaceuticals as a sell. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity.

Highlights from the ratings report include:
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Biotechnology industry and the overall market, MOMENTA PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • 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 46.8% when compared to the same quarter one year prior, rising from -$30.06 million to -$15.98 million.
  • This stock has increased by 74.84% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in MNTA do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
  • MOMENTA PHARMACEUTICALS INC has improved earnings per share by 47.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, MOMENTA PHARMACEUTICALS INC continued to lose money by earning -$1.91 versus -$2.14 in the prior year. This year, the market expects an improvement in earnings (-$0.78 versus -$1.91).
  • Net operating cash flow has significantly increased by 95.96% to -$1.08 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 47.73%.

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