1-Star Stocks Poised to Plunge: Cadence Pharmaceuticals?

Brian D. Pacampara, The Motley Fool
Updated

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

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

Cadencefacts

Headquarters (Founded)

San Diego (2004)

Market Cap

$267.2 million

Industry

Pharmaceuticals

Trailing-12-Month Revenue

$10.8 million

Management

Co-Founder/CEO Theodore Schroeder
CFO William LaRue

Return on Capital (Average, Past 3 Years)

(44.9%)

Cash/Debt

$67.6 million / $27.2 million

Competitors

Cephalon
Cumberland Pharmaceuticals
Pacira Pharmaceuticals

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

On CAPS, 33% of the 102 members who have rated Cadence believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, All-Star zzlangerhans, tapped the stock as an untimely opportunity:

I expect Cadence will display a pattern of weakly increasing revenues that never match the increasing cost of sales and SGA expenses. The share price has remained relatively stable since the last PR, but I expect the stock will gap down again when the next quarterly earnings statement comes out in early March.

What do you think about Cadence, 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 thisarticle 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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