1-Star Stocks Poised to Plunge: Cadence Pharmaceuticals?

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 (Nasdaq: 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.

Cadence facts

Headquarters (founded) San Diego (2004)
Market Cap $367.0 million
Industry Pharmaceuticals
Trailing-12-Month Revenue $24.4 million
Management Co-Founder/CEO Theodore Schroeder
CFO William LaRue
Return on Equity (average, past 3 years) (76.4%)
Cash/Debt $108.6 million / $28.8 million
Competitors Teva Pharmaceutical
Cumberland Pharmaceuticals
Pacira Pharmaceuticals

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

On CAPS, 37% of the 98 members who have rated Cadence believe the stock will underperform the S&P 500 going forward.

Earlier this week, one of those Fools, All-Star zzlangerhans, succinctly summed up the bear case for our community:

Cadence has gapped down on earnings the last three quarters and I don't see that as likely to change on August 2. Ofirmev revenues have been increasing moderately behind a furious marketing drive but are still a long way from matching SGA expenses and quarterly burn. With the share price up 50% from recent lows as the summer tide lifts the biopharma sector, look to Cadence to be at the forefront of the wave back downward.

If you want market-thumping returns, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future. Cadence, with its one-star rating, may not fit the bill for your portfolio.

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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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