1-Star Stocks Poised to Plunge: Ironwood Pharmaceuticals?

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, drug developer Ironwood Pharmaceuticals (NAS: IRWD) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Ironwood's business and see what CAPS investors are saying about the stock right now.

Ironwoodfacts

Headquarters (founded)Cambridge, Mass. (1998)
Market Cap$1.4 billion
IndustryBiotechnology
Trailing-12-Month Revenue$50.5 million
ManagementCo-Founder/CEO Peter Hecht
COO/CFO Michael Higgins
Trailing-12-Month Return on Equity(49.5%)
Cash/Debt$175.1 million / $709 thousand
CompetitorsSucampo Pharmaceuticals
Takeda Pharmaceutical Company
Theravance

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 26% of the 31 members who have rated Ironwood believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, All-Star zzlangerhans, touched on Ironwood's seemingly unsustainable stock price action:

Just a "technical" short on Ironwood as they bounce back up over [$13 per share] from a recent trough. Equilibrium value seems to be about [$12] as the company glides eventlessly toward the linaclotide PDUFA in late June. I could just as easily have green thumbed below [$11] a couple of weeks ago but I feel more comfortable on the short side since I think the stock will likely sell off after approval. I've been right seven or eight times already, so what the heck.

What do you think about Ironwood, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!

Want to see how well (or not so well) the stocks in this series are performing? Follow the newTrackPoisedToCAPS account.

At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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