Baxter International (BAX) Is Today's Storm The Castle 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 Baxter International (BAX) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Baxter International as such a stock due to the following factors:
- BAX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $182.1 million.
- BAX has traded 817,068 shares today.
- BAX is trading at 2.19 times the normal volume for the stock at this time of day.
- BAX crossed above its 200-day simple moving average.
'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.EXCLUSIVE OFFER: Get the inside scoop on opportunities in BAX with the Ticky from Trade-Ideas. See the FREE profile for BAX NOW at Trade-IdeasMore details on BAX: Baxter International Inc., through its subsidiaries, develops, manufactures, and markets products for people with hemophilia, immune disorders, infectious diseases, kidney disease, trauma, and other chronic and acute medical conditions. The stock currently has a dividend yield of 2.8%. BAX has a PE ratio of 19.0. Currently there are 5 analysts that rate Baxter International a buy, no analysts rate it a sell, and 9 rate it a hold.The average volume for Baxter International has been 3.2 million shares per day over the past 30 days. Baxter International has a market cap of $37.7 billion and is part of the health care sector and health services industry. The stock has a beta of 0.58 and a short float of 1.7% with 3.51 days to cover. Shares are down 1.3% year-to-date as of the close of trading on Tuesday.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 Baxter International as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 26.2%. Since the same quarter one year prior, revenues rose by 16.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has increased to $1,083.00 million or 14.60% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -20.04%.
- The gross profit margin for BAXTER INTERNATIONAL INC is rather high; currently it is at 55.24%. Regardless of BAX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 7.46% trails the industry average.
- BAXTER INTERNATIONAL INC's earnings per share declined by 33.7% 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, BAXTER INTERNATIONAL INC reported lower earnings of $3.65 versus $4.18 in the prior year. This year, the market expects an improvement in earnings ($5.15 versus $3.65).
- In its most recent trading session, BAX has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- You can view the full Baxter International 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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