Neurocrine Biosciences (NBIX) Highlighted As Today's Perilous Reversal 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 Neurocrine Biosciences ( NBIX) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Neurocrine Biosciences as such a stock due to the following factors:

  • NBIX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $48.7 million.
  • NBIX has traded 51,780 shares today.
  • NBIX is down 3.5% today.
  • NBIX was up 5.7% yesterday.

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More details on NBIX:

Neurocrine Biosciences, Inc. discovers and develops pharmaceuticals for the treatment of neurological and endocrine-related diseases and disorders in the United States. Currently there are 8 analysts that rate Neurocrine Biosciences a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Neurocrine Biosciences has been 1.1 million shares per day over the past 30 days. Neurocrine has a market cap of $3.4 billion and is part of the health care sector and drugs industry. The stock has a beta of -0.91 and a short float of 9.4% with 4.83 days to cover. Shares are up 79.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Neurocrine Biosciences as a sell. The area that we feel has been the company's primary weakness has been its disappointing return on equity.

Highlights from the ratings report include:
  • The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • NEUROCRINE BIOSCIENCES INC 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, NEUROCRINE BIOSCIENCES INC reported poor results of -$0.82 versus -$0.69 in the prior year. This year, the market expects an improvement in earnings (-$0.79 versus -$0.82).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Biotechnology industry. The net income increased by 89.9% when compared to the same quarter one year prior, rising from -$11.84 million to -$1.19 million.
  • This stock has increased by 180.79% 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 NBIX do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

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