Why Derma Sciences Is Poised to Pull Back

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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 has received the dreaded 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 Sciencesfacts

Headquarters (founded)

Princeton, N.J. (since 1984)

Market Cap

$162.3 million

Industry

Health care supplies

Trailing-12-Month Revenue

$69.1 million

Management

Chairman/CEO Edward Quilty
CFO John Yetter

Return on Equity (average, past 3 years)

(11.1%)

Cash/Debt

$15.6 million / $0

Competitors

ConvaTec
Covidien
Johnson & Johnson


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

On CAPS, 55% of the 22 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:

I've never been a believer in Derma so I'll fling myself onto this rising knife. There's no consistent upward trend in quarterly revenues and the company seems to be dragging their heels on a phase III trial of DSC127 . Could that be because the FDA wants an active comparator instead of placebo and the company knows they won't get stat sig in ulcer healing with that approach? Meanwhile, the dilution continues. As I've said before, I don't grudge Derma [$100M] in enterprise value. Above that I start getting skeptical.

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The article Why Derma Sciences Is Poised to Pull Back originally appeared on Fool.com.

Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Covidien Ltd. and Johnson & Johnson. The Motley Fool owns shares of 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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