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Trade-Ideas: Bristol-Myers Squibb Company (BMY) 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 Bristol-Myers Squibb Company ( BMY) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Bristol-Myers Squibb Company as such a stock due to the following factors:

  • BMY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $313.2 million.
  • BMY has a PE ratio of 56.4.
  • BMY is currently in the upper 30% of its 1-year range.
  • BMY is in the upper 25% of its 20-day range.
  • BMY is in the upper 35% of its 5-day range.
  • BMY is currently trading above yesterday's high.
  • BMY has experienced a gap between today's open and yesterday's close of 0.9%.

'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 BMY with the Ticky from Trade-Ideas. See the FREE profile for BMY NOW at Trade-Ideas

More details on BMY:

Bristol-Myers Squibb Company, a biopharmaceutical company, discovers, develops, licenses, manufactures, markets, distributes, and sells biopharmaceutical products that help patients prevail over serious diseases worldwide. The stock currently has a dividend yield of 3%. BMY has a PE ratio of 56.4. Currently there are 7 analysts that rate Bristol-Myers Squibb Company a buy, 1 analyst rates it a sell, and 10 rate it a hold.

The average volume for Bristol-Myers Squibb Company has been 7.1 million shares per day over the past 30 days. Bristol-Myers Squibb has a market cap of $77.1 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.22 and a short float of 1.5% with 4.67 days to cover. Shares are up 43.7% year to date as of the close of trading on Friday.

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 Bristol-Myers Squibb Company as a buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • Net operating cash flow has increased to $1,510.00 million or 33.15% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -1.69%.
  • The gross profit margin for BRISTOL-MYERS SQUIBB CO is currently very high, coming in at 80.68%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, BMY's net profit margin of 13.24% significantly trails the industry average.
  • Compared to its closing price of one year ago, BMY's share price has jumped by 38.73%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that BMY's debt-to-equity ratio is low, the quick ratio, which is currently 0.56, displays a potential problem in covering short-term cash needs.
  • BRISTOL-MYERS SQUIBB CO's earnings per share declined by 15.8% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, BRISTOL-MYERS SQUIBB CO reported lower earnings of $1.15 versus $2.15 in the prior year. This year, the market expects an improvement in earnings ($1.73 versus $1.15).

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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