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

  • SPNC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $44.6 million.
  • SPNC has traded 120,484 shares today.
  • SPNC is up 3.4% today.
  • SPNC was down 5.1% yesterday.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in SPNC with the Ticky from Trade-Ideas. See the FREE profile for SPNC NOW at Trade-Ideas

More details on SPNC:

The Spectranetics Corporation, together with its subsidiaries, develops, manufactures, markets, and distributes single-use medical devices used in minimally invasive procedures in the cardiovascular system. Currently there are 7 analysts that rate Spectranetics a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Spectranetics has been 532,800 shares per day over the past 30 days. Spectranetics has a market cap of $1.1 billion and is part of the health care sector and health services industry. Shares are down 29.6% year-to-date as of the close of trading on Friday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Spectranetics as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 0.8%. Since the same quarter one year prior, revenues rose by 45.0%. 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.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The gross profit margin for SPECTRANETICS CORP is rather high; currently it is at 66.86%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, SPNC's net profit margin of -47.55% significantly underperformed when compared to the industry average.
  • SPECTRANETICS CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, SPECTRANETICS CORP reported poor results of -$0.98 versus -$0.02 in the prior year. For the next year, the market is expecting a contraction of 5.6% in earnings (-$1.04 versus -$0.98).
  • 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 Health Care Equipment & Supplies industry. The net income has significantly decreased by 382.3% when compared to the same quarter one year ago, falling from -$5.66 million to -$27.31 million.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

More from Markets

Replay: Jim Cramer on the Markets, Tiffany, Micron Technology and Union Pacific

Replay: Jim Cramer on the Markets, Tiffany, Micron Technology and Union Pacific

Carnival CEO Arnold Donald: China Will Become the Largest Cruise Market

Carnival CEO Arnold Donald: China Will Become the Largest Cruise Market

Red Robin Slumps After Earnings Miss

Red Robin Slumps After Earnings Miss

Owner of Moviepass Sees Stock Plummet

Owner of Moviepass Sees Stock Plummet

Tiffany & Co. Sees a Strong Market in Asia

Tiffany & Co. Sees a Strong Market in Asia