Cambrex (CBM) Showing Signs Of A Dead Cat Bounce 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.

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

  • CBM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $24.6 million.
  • CBM has traded 84,382 shares today.
  • CBM is up 3.2% today.
  • CBM was down 6.4% yesterday.

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More details on CBM:

Cambrex Corporation, a life sciences company, provides various products and services for the development and commercialization of new and generic therapeutics worldwide. CBM has a PE ratio of 18.5. Currently there is 1 analyst that rates Cambrex a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Cambrex has been 506,800 shares per day over the past 30 days. Cambrex has a market cap of $1.2 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.75 and a short float of 1.4% with 1.10 days to cover. Shares are up 76.4% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Cambrex as a buy. 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, notable return on equity, reasonable valuation levels and solid stock price performance. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.8%. Since the same quarter one year prior, revenues rose by 17.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CBM's debt-to-equity ratio is very low at 0.25 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.09, which illustrates the ability to avoid short-term cash problems.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Life Sciences Tools & Services industry and the overall market, CAMBREX CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • Powered by its strong earnings growth of 550.00% and other important driving factors, this stock has surged by 80.27% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CBM should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.

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