Trade-Ideas: Opko Health (OPK) Is Today's "Barbarian At The Gate" 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 Opko Health (OPK) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Opko Health as such a stock due to the following factors:
- OPK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $35.1 million.
- OPK has traded 3.3 million shares today.
- OPK traded in a range 229.8% of the normal price range with a price range of $0.81.
- OPK traded above its daily resistance level (quality: 531 days, meaning that the stock is crossing a resistance level set by the last 531 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock s movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.EXCLUSIVE OFFER: Get the inside scoop on opportunities in OPK with the Ticky from Trade-Ideas. See the FREE profile for OPK NOW at Trade-IdeasMore details on OPK: Opko Health, Inc., a pharmaceutical and diagnostics company, engages in the discovery, development, and commercialization of novel and proprietary technologies. It operates in two segments, Pharmaceuticals and Diagnostics. Currently there are 3 analysts that rate Opko Health a buy, no analysts rate it a sell, and none rate it a hold.The average volume for Opko Health has been 1.8 million shares per day over the past 30 days. Opko Health has a market cap of $2.9 billion and is part of the health care sector and health services industry. The stock has a beta of 1.44 and a short float of 20.9% with 8.07 days to cover. Shares are up 76.5% 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 Opko Health as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and feeble growth in the company's earnings per share.Highlights from the ratings report include:
- OPK's very impressive revenue growth greatly exceeded the industry average of 9.7%. Since the same quarter one year prior, revenues leaped by 133.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Powered by its strong earnings growth of 75.00% and other important driving factors, this stock has surged by 95.88% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- OPK's debt-to-equity ratio of 0.66 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.22 is very high and demonstrates very strong liquidity.
- OPKO HEALTH INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, OPKO HEALTH INC reported poor results of -$0.10 versus -$0.03 in the prior year. For the next year, the market is expecting a contraction of 150.0% in earnings (-$0.25 versus -$0.10).
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Biotechnology industry and the overall market, OPKO HEALTH INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full Opko Health 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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