Today's Perilous Reversal Stock: AMAG Pharmaceuticals (AMAG)

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

  • AMAG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $21.2 million.
  • AMAG has traded 67,864 shares today.
  • AMAG is down 3.2% today.
  • AMAG was up 7.8% yesterday.

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More details on AMAG:

AMAG Pharmaceuticals, Inc., a specialty pharmaceutical company, provides products and services with a focus on maternal health, anemia management, and cancer supportive care in the United States. AMAG has a PE ratio of 7. Currently there are 4 analysts that rate AMAG Pharmaceuticals a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for AMAG Pharmaceuticals has been 1.0 million shares per day over the past 30 days. AMAG has a market cap of $862.7 million and is part of the health care sector and drugs industry. The stock has a beta of 0.71 and a short float of 35.4% with 9.43 days to cover. Shares are down 10.9% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates AMAG Pharmaceuticals as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • AMAG's revenue growth has slightly outpaced the industry average of 20.2%. Since the same quarter one year prior, revenues rose by 22.1%. 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.
  • The gross profit margin for AMAG PHARMACEUTICALS INC is currently very high, coming in at 86.71%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -6.88% is in-line with the industry average.
  • Even though the current debt-to-equity ratio is 1.07, it is still below the industry average, suggesting that this level of debt is acceptable within the Biotechnology industry. Despite the fact that AMAG's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.27 is high and demonstrates strong liquidity.
  • Net operating cash flow has declined marginally to $26.58 million or 9.59% 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.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 63.10%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 156.41% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.

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