Trade-Ideas LLC identified ARIAD Pharmaceuticals ( ARIA) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) 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 $21.8 million.
  • ARIA has traded 4.5 million shares today.
  • ARIA traded in a range 202% of the normal price range with a price range of $0.54.
  • ARIA traded above its daily resistance level (quality: 18 days, meaning that the stock is crossing a resistance level set by the last 18 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on ARIA:

ARIAD Pharmaceuticals, Inc., an oncology company, engages in the discovery, development, and commercialization of drugs for cancer patients in the United States and internationally. Currently there are 3 analysts that rate ARIAD Pharmaceuticals a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for ARIAD Pharmaceuticals has been 4.2 million shares per day over the past 30 days. ARIAD has a market cap of $1.4 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.92 and a short float of 21.6% with 11.42 days to cover. Shares are up 12.8% year-to-date as of the close of trading on Tuesday.

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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 deteriorating net income, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • 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 Biotechnology industry average. The net income has decreased by 2.1% when compared to the same quarter one year ago, dropping from -$52.68 million to -$53.79 million.
  • Net operating cash flow has decreased to -$65.10 million or 29.68% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • ARIA has underperformed the S&P 500 Index, declining 17.20% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • ARIAD PHARMACEUTICALS INC reported flat earnings per share in the most recent quarter. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ARIAD PHARMACEUTICALS INC reported poor results of -$1.22 versus -$0.87 in the prior year. This year, the market expects an improvement in earnings (-$0.71 versus -$1.22).
  • The revenue growth came in higher than the industry average of 19.5%. Since the same quarter one year prior, revenues rose by 48.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.

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