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

  • PTCT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $47.3 million.
  • PTCT has traded 57,436 shares today.
  • PTCT is up 5.4% today.
  • PTCT was down 12.7% yesterday.

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

More details on PTCT:

PTC Therapeutics, Inc., a biopharmaceutical company, focuses on the discovery, development, and commercialization of orally administered, small molecule drugs that target post-transcriptional control processes. Currently there are 8 analysts that rate PTC Therapeutics a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for PTC Therapeutics has been 696,800 shares per day over the past 30 days. PTC has a market cap of $2.0 billion and is part of the health care sector and drugs industry. Shares are up 15.6% year-to-date as of the close of trading on Monday.

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 PTC Therapeutics as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • PTC THERAPEUTICS INC 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 year. We anticipate that this should continue in the coming year. During the past fiscal year, PTC THERAPEUTICS INC reported poor results of -$3.21 versus -$1.56 in the prior year. For the next year, the market is expecting a contraction of 64.8% in earnings (-$5.29 versus -$3.21).
  • 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 Biotechnology industry. The net income has significantly decreased by 168.9% when compared to the same quarter one year ago, falling from -$14.10 million to -$37.92 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Biotechnology industry and the overall market, PTC THERAPEUTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The revenue fell significantly faster than the industry average of 18.7%. Since the same quarter one year prior, revenues fell by 18.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Compared to its closing price of one year ago, PTCT's share price has jumped by 235.39%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in PTCT do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

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

Emerging Markets Get Pounded by Trade War Concerns

Emerging Markets Get Pounded by Trade War Concerns

Dow Tumbles, Stocks Slide on Renewed Trade War Concerns

Dow Tumbles, Stocks Slide on Renewed Trade War Concerns

PTC Shares Skyrocket on Positive Data for Spinal Muscular Atrophy Drug

PTC Shares Skyrocket on Positive Data for Spinal Muscular Atrophy Drug

Tesla Slumps After Mary McCormack Tweets Husband's Flaming Model S

Tesla Slumps After Mary McCormack Tweets Husband's Flaming Model S

Stocks Dive Globally as U.S.-China Trade War Intensifies

Stocks Dive Globally as U.S.-China Trade War Intensifies