Perrigo Company (PRGO) Showing Signs Of Being A 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 Perrigo Company (PRGO) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Perrigo Company as such a stock due to the following factors:
- PRGO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $191.8 million.
- PRGO has a PE ratio of 32.8.
- PRGO is currently in the upper 30% of its 1-year range.
- PRGO is in the upper 25% of its 20-day range.
- PRGO is in the upper 35% of its 5-day range.
- PRGO is currently trading above yesterday's high.
- PRGO has experienced a gap between today's open and yesterday's close of 1.7%.
'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 PRGO with the Ticky from Trade-Ideas. See the FREE profile for PRGO NOW at Trade-IdeasMore details on PRGO: Perrigo is buying Canam Care as of Jan 2012 for $36. The stock currently has a dividend yield of 0.2%. PRGO has a PE ratio of 32.8. Currently there are 11 analysts that rate Perrigo Company a buy, no analysts rate it a sell, and 5 rate it a hold.The average volume for Perrigo Company has been 1.1 million shares per day over the past 30 days. Perrigo has a market cap of $19.0 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.10 and a short float of 2.5% with 1.86 days to cover. Shares are down 7.5% 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 Perrigo Company as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins 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:
- The revenue growth came in higher than the industry average of 0.7%. Since the same quarter one year prior, revenues rose by 10.9%. 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.
- The current debt-to-equity ratio, 0.39, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, PRGO has a quick ratio of 1.51, which demonstrates the ability of the company to cover short-term liquidity needs.
- 43.25% is the gross profit margin for PERRIGO CO PLC which we consider to be strong. 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 -8.79% is in-line with the industry average.
- PERRIGO CO PLC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PERRIGO CO PLC increased its bottom line by earning $4.67 versus $4.18 in the prior year. This year, the market expects an improvement in earnings ($6.62 versus $4.67).
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full Perrigo 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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