Trade-Ideas LLC identified ARIAD Pharmaceuticals ( ARIA) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified ARIAD Pharmaceuticals as such a stock due to the following factors:

  • ARIA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $64.3 million.
  • ARIA has traded 494,659 shares today.
  • ARIA is down 7.5% today.
  • ARIA was up 41.7% yesterday.

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More details on ARIA:

ARIAD Pharmaceuticals, Inc., an oncology company, engages in the discovery, development, and commercialization of medicines for cancer patients. Currently there are 2 analysts that rate ARIAD Pharmaceuticals a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for ARIAD Pharmaceuticals has been 3.1 million shares per day over the past 30 days. ARIAD has a market cap of $1.3 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.58 and a short float of 27.5% with 6.64 days to cover. Shares are up 1.6% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates ARIAD Pharmaceuticals as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Biotechnology industry average, but is greater than that of the S&P 500. The net income has decreased by 10.9% when compared to the same quarter one year ago, dropping from -$56.92 million to -$63.16 million.
  • ARIAD PHARMACEUTICALS INC's earnings per share declined by 10.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ARIAD PHARMACEUTICALS INC continued to lose money by earning -$0.87 versus -$1.49 in the prior year. For the next year, the market is expecting a contraction of 35.0% in earnings (-$1.18 versus -$0.87).
  • Looking at where the stock is today compared to one year ago, we find that it is higher, and it has outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • Net operating cash flow has increased to -$28.42 million or 34.93% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 13.92%.
  • ARIA's very impressive revenue growth greatly exceeded the industry average of 8.2%. Since the same quarter one year prior, revenues leaped by 141.4%. 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.

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