1-Star Stocks Poised to Plunge: Derma Sciences?

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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, wound care products company Derma Sciences(NASDAQ:DSCI) has received a distressing one-star ranking.

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

Derma Sciences facts

Headquarters (founded)

Princeton, N.J. (since 1984)

Market Cap

$150 million

Industry

Health care supplies

Trailing-12-Month Revenue

$65.3 million

Management

Chairman/CEO Edward Quilty
CFO John Yetter

Trailing-12-Month Return on Equity

8.6%

Cash/Debt

$18.8 million / $0

Competitors

Covidien (NYS: COV)
Johnson & Johnson (NYS: JNJ)


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

On CAPS, 8% of the 13 members who have rated Derma Sciences believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, All-Star zzlangerhans, succinctly summed up the Derma Sciences bear case for our community:

They still lose money every quarter, there's no upward trend in revenues, and they seem to drag out their pipeline development endlessly. The company is now saying they will "begin their phase III program" for DSC127 for diabetic foot ulcers in 12/12. ...

When it finally really does begin, the phase III trial will compare DSC127 with placebo, and there's a good chance of showing stat sig benefit. That won't necessarily translate into commercial viability, however, as there are already many wound treatments for diabetic foot ulcers that do better than placebo. ... I expect significantly more dilution to take place before we see any phase III results for DSC127.

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The article 1-Star Stocks Poised to Plunge: Derma Sciences? originally appeared on Fool.com.

Fool contributor Brian Pacampara has no positions in the stocks mentioned above. The Motley Fool owns shares of Johnson & Johnson. Motley Fool newsletter services recommend Covidien Ltd. and Johnson & Johnson. 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 Motley Fool has a disclosure policy.

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