NEW YORK (TheStreet) -- Shares of Ceres (CERE) were gaining 31.5% to $1.32 on heavy trading volume on Tuesday after the agricultural chemicals company announced a new licensing agreement with KWS SAAT SE.
The global seed developer will evaluate Ceres' Persephone bioinformatics technology under the license agreement. The Persephone system lets researchers organize, store, access, and explore "a diverse array of DNA-related information in much the same way online mapping programs allow users to explore geographic regions and locations."
"We look forward to working with researchers at KWS to demonstrate how Persephone can help deliver complex genomic information directly to its diverse product development groups," Ceres VP of Genomic Technologies Tim Swaller, said in a statement.
About 2.3 million shares of Ceres were traded by 10:06 a.m. today, well above the company's average trading volume of about 605,000 shares a day.
TheStreet Ratings team rates CERES INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
We rate CERES INC (CERE) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally disappointing historical performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CERES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- CERE's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 71.28%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- CERES INC has improved earnings per share by 27.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, CERES INC continued to lose money by earning -$7.36 versus -$10.48 in the prior year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 23.6% when compared to the same quarter one year prior, going from -$7.73 million to -$5.90 million.
- Net operating cash flow has increased to -$5.80 million or 10.62% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -19.71%.
- You can view the full analysis from the report here: CERE