Today's Dead Cat Bounce Stock: Bruker (BRKR)

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

  • BRKR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $24.5 million.
  • BRKR has traded 2.9 million shares today.
  • BRKR is up 3.2% today.
  • BRKR was down 14.3% yesterday.

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More details on BRKR:

Bruker Corporation, together with its subsidiaries, designs, manufactures, sells, and services proprietary life science and materials research systems, and associated products worldwide. It operates through two segments, Bruker Scientific Instruments, and Bruker Energy & Supercon Technologies. BRKR has a PE ratio of 69. Currently there are 5 analysts that rate Bruker a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Bruker has been 789,300 shares per day over the past 30 days. Bruker has a market cap of $3.8 billion and is part of the health care sector and health services industry. The stock has a beta of 0.45 and a short float of 7.6% with 5.12 days to cover. Shares are down 3% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Bruker as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and relatively poor performance when compared with the S&P 500 during the past year.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.49, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.33, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has increased to $27.00 million or 45.94% when compared to the same quarter last year. In addition, BRUKER CORP has also vastly surpassed the industry average cash flow growth rate of -13.60%.
  • 49.76% is the gross profit margin for BRUKER CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 1.83% trails the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Life Sciences Tools & Services industry average. The net income has significantly decreased by 25.3% when compared to the same quarter one year ago, falling from $8.70 million to $6.50 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Life Sciences Tools & Services industry and the overall market, BRUKER CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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