New Lifetime High For Pharmacyclics (PCYC)

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 Pharmacyclics ( PCYC) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Pharmacyclics as such a stock due to the following factors:

  • PCYC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $180.7 million.
  • PCYC has traded 4,208 shares today.
  • PCYC is trading at a new lifetime high.

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More details on PCYC:

Pharmacyclics, Inc., a biopharmaceutical company, focuses on developing and commercializing novel therapies for the treatment of cancer and immune-mediated diseases in the United States. PCYC has a PE ratio of 281. Currently there are 2 analysts that rate Pharmacyclics a buy, no analysts rate it a sell, and 9 rate it a hold.

The average volume for Pharmacyclics has been 1.5 million shares per day over the past 30 days. Pharmacyclics has a market cap of $20.0 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.55 and a short float of 5.9% with 3.71 days to cover. Shares are up 111.6% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Pharmacyclics as a hold. 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 and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • PCYC's very impressive revenue growth greatly exceeded the industry average of 19.9%. Since the same quarter one year prior, revenues leaped by 72.4%. 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.
  • PCYC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 5.07, which clearly demonstrates the ability to cover short-term cash needs.
  • Compared to its closing price of one year ago, PCYC's share price has jumped by 147.57%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • 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. In comparison to the other companies in the Biotechnology industry and the overall market, PHARMACYCLICS INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The gross profit margin for PHARMACYCLICS INC is currently extremely low, coming in at 4.83%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 2.01% significantly trails the industry average.

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