Trade-Ideas: Biogen Idec (BIIB) Is Today's Momo Momentum Stock
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.Trade-Ideas LLC identified Biogen Idec (BIIB) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Biogen Idec as such a stock due to the following factors:
- BIIB has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $224.0 million.
- BIIB has a PE ratio of 35.7.
- BIIB is currently in the upper 30% of its 1-year range.
- BIIB is in the upper 25% of its 20-day range.
- BIIB is in the upper 35% of its 5-day range.
- BIIB is currently trading above yesterday's high.
- BIIB has experienced a gap between today's open and yesterday's close of 0.5%.
'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.EXCLUSIVE OFFER: Get the inside scoop on opportunities in BIIB with the Ticky from Trade-Ideas. See the FREE profile for BIIB NOW at Trade-IdeasMore details on BIIB: Biogen Idec Inc. discovers, develops, manufactures, and markets therapies for the treatment of neurodegenerative diseases, hemophilia, and autoimmune disorders in the United States and internationally. BIIB has a PE ratio of 35.7. Currently there are 12 analysts that rate Biogen Idec a buy, no analysts rate it a sell, and 9 rate it a hold.The average volume for Biogen Idec has been 1.5 million shares per day over the past 30 days. Biogen Idec has a market cap of $53.4 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.33 and a short float of 1.1% with 2.39 days to cover. Shares are up 53.8% year to date as of the close of trading on Thursday.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.TheStreetRatings.com Analysis:TheStreet Quant Ratings rates Biogen Idec as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.Highlights from the ratings report include:
- BIOGEN IDEC INC has improved earnings per share by 43.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, BIOGEN IDEC INC increased its bottom line by earning $5.76 versus $5.03 in the prior year. This year, the market expects an improvement in earnings ($8.09 versus $5.76).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Biotechnology industry average. The net income increased by 41.0% when compared to the same quarter one year prior, rising from $302.66 million to $426.75 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 12.3%. Since the same quarter one year prior, revenues slightly increased by 9.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- BIIB's debt-to-equity ratio is very low at 0.12 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.63, which clearly demonstrates the ability to cover short-term cash needs.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Biotechnology industry and the overall market, BIOGEN IDEC INC's return on equity exceeds that of both the industry average and the S&P 500.
- You can view the full Biogen Idec Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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