Trade-Ideas: Mead Johnson Nutrition Company (MJN) Is Today's "Perilous Reversal" 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 Mead Johnson Nutrition Company (MJN) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Mead Johnson Nutrition Company as such a stock due to the following factors:
- MJN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $164.3 million.
- MJN has traded 2,000 shares today.
- MJN is down 3.1% today.
- MJN was up 5.3% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in MJN with the Ticky from Trade-Ideas. See the FREE profile for MJN NOW at Trade-IdeasMore details on MJN: Mead Johnson Nutrition Company manufactures, distributes, and sells infant formulas, children's nutrition, and other nutritional products. The stock currently has a dividend yield of 1.9%. MJN has a PE ratio of 23.5. Currently there are 3 analysts that rate Mead Johnson Nutrition Company a buy, no analysts rate it a sell, and 7 rate it a hold.The average volume for Mead Johnson Nutrition Company has been 1.9 million shares per day over the past 30 days. Mead Johnson Nutrition has a market cap of $14.3 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 0.77 and a short float of 1.7% with 1.66 days to cover. Shares are up 13% 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 Mead Johnson Nutrition Company as a buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, expanding profit margins, good cash flow from operations, growth in earnings per share and revenue growth. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.Highlights from the ratings report include:
- Compared to other companies in the Food Products industry and the overall market, MEAD JOHNSON NUTRITION CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for MEAD JOHNSON NUTRITION CO is rather high; currently it is at 64.27%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 16.62% is above that of the industry average.
- Net operating cash flow has significantly increased by 971.64% to $207.90 million when compared to the same quarter last year. In addition, MEAD JOHNSON NUTRITION CO has also vastly surpassed the industry average cash flow growth rate of 233.53%.
- MEAD JOHNSON NUTRITION CO has improved earnings per share by 6.3% 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, MEAD JOHNSON NUTRITION CO increased its bottom line by earning $2.96 versus $2.47 in the prior year. This year, the market expects an improvement in earnings ($3.24 versus $2.96).
- MJN's revenue growth trails the industry average of 20.5%. Since the same quarter one year prior, revenues slightly increased by 5.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- You can view the full Mead Johnson Nutrition Company 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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