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Alexion Pharmaceuticals (ALXN) Highlighted As 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 Alexion Pharmaceuticals ( ALXN) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Alexion Pharmaceuticals as such a stock due to the following factors:

  • ALXN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $172.0 million.
  • ALXN has a PE ratio of 74.0.
  • ALXN is currently in the upper 30% of its 1-year range.
  • ALXN is in the upper 25% of its 20-day range.
  • ALXN is in the upper 35% of its 5-day range.
  • ALXN is currently trading above yesterday's high.
  • ALXN has experienced a gap between today's open and yesterday's close of 0.7%.

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

More details on ALXN:

Alexion Pharmaceuticals, Inc., a biopharmaceutical company, engages in the development and commercialization of life-transforming therapeutic products. ALXN has a PE ratio of 74.0. Currently there are 15 analysts that rate Alexion Pharmaceuticals a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Alexion Pharmaceuticals has been 1.1 million shares per day over the past 30 days. Alexion has a market cap of $25.7 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.66 and a short float of 2.1% with 2.85 days to cover. Shares are up 39.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Alexion Pharmaceuticals as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, growth in earnings per share and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 11.1%. Since the same quarter one year prior, revenues rose by 36.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • ALXN's debt-to-equity ratio is very low at 0.06 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 4.32, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has slightly increased to $144.28 million or 2.08% when compared to the same quarter last year. In addition, ALEXION PHARMACEUTICALS INC has also modestly surpassed the industry average cash flow growth rate of 1.32%.
  • ALEXION PHARMACEUTICALS INC's earnings per share improvement from the most recent quarter was slightly positive. 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, ALEXION PHARMACEUTICALS INC increased its bottom line by earning $1.27 versus $0.91 in the prior year. This year, the market expects an improvement in earnings ($3.05 versus $1.27).
  • The gross profit margin for ALEXION PHARMACEUTICALS INC is currently very high, coming in at 91.24%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 23.42% trails the industry average.

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