Today's Dead Cat Bounce Stock: Horizon Pharma (HZNP)

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

  • HZNP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $133.2 million.
  • HZNP has traded 101,816 shares today.
  • HZNP is up 3.9% today.
  • HZNP was down 6% yesterday.

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

More details on HZNP:

Horizon Pharma plc, a specialty biopharmaceutical company, engages in identifying, developing, acquiring or in-licensing, and commercializing medicines for the treatment of arthritis, pain, inflammatory, and/or orphan diseases in the United States and internationally. Currently there are 5 analysts that rate Horizon Pharma a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Horizon Pharma has been 3.9 million shares per day over the past 30 days. Horizon has a market cap of $3.6 billion and is part of the health care sector and drugs industry. The stock has a beta of 2.15 and a short float of 8% with 1.76 days to cover. Shares are up 121.3% year-to-date as of the close of trading on Thursday.

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 Horizon Pharma as a sell. The area that we feel has been the company's primary weakness has been its generally higher debt management risk.

Highlights from the ratings report include:
  • HZNP's debt-to-equity ratio of 0.64 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.34 is sturdy.
  • The gross profit margin for HORIZON PHARMA PLC is currently very high, coming in at 81.99%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, HZNP's net profit margin of -30.47% significantly underperformed when compared to the industry average.
  • Compared to other companies in the Pharmaceuticals industry and the overall market, HORIZON PHARMA PLC's return on equity significantly trails that of both the industry average and the S&P 500.
  • HORIZON PHARMA PLC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HORIZON PHARMA PLC reported poor results of -$3.70 versus -$2.29 in the prior year. This year, the market expects an improvement in earnings ($1.23 versus -$3.70).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Pharmaceuticals industry. The net income increased by 69.2% when compared to the same quarter one year prior, rising from -$102.90 million to -$31.65 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

North Korea, Apple, GPDR and Gap - 5 Things You Must Know

North Korea, Apple, GPDR and Gap - 5 Things You Must Know

One Thing to Consider Over Memorial Day Weekend: Are Stocks About to Collapse?

One Thing to Consider Over Memorial Day Weekend: Are Stocks About to Collapse?

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Oil Falls Sharply After Saudi Arabia, Russia Suggest Production Cut Easing

Oil Falls Sharply After Saudi Arabia, Russia Suggest Production Cut Easing

Netflix Ready to Surpass Disney as America's Most Valuable Media Company

Netflix Ready to Surpass Disney as America's Most Valuable Media Company