Dr Reddy Laboratories (RDY) Flagged As Strong On High Volume
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.
Trade-Ideas LLC identified
(
) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Dr Reddy Laboratories as such a stock due to the following factors:
- RDY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.9 million.
- RDY has traded 133,482 shares today.
- RDY is trading at 6.84 times the normal volume for the stock at this time of day.
- RDY is trading at a new high 3.30% above yesterday's close.
'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. 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. 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 RDY with the Ticky from Trade-Ideas. See the FREE profile for RDY NOW at Trade-Ideas
More details on RDY:
Dr. Reddy's Laboratories Limited operates as an integrated pharmaceutical company in India. It operates in three segments: Global Generics, Pharmaceutical Services and Active Ingredients (PSAI), and Proprietary Products. The stock currently has a dividend yield of 0.5%. RDY has a PE ratio of 26.4. Currently there is 1 analyst that rates Dr Reddy Laboratories a buy, 1 analyst rates it a sell, and 1 rates it a hold.
The average volume for Dr Reddy Laboratories has been 308,700 shares per day over the past 30 days. Dr Reddy has a market cap of $9.5 billion and is part of the health care sector and drugs industry. Shares are up 9.9% year-to-date as of the close of trading on Monday.
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.
Analysis:
rates Dr Reddy Laboratories as a
. 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, reasonable valuation levels, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- RDY's revenue growth has slightly outpaced the industry average of 8.2%. Since the same quarter one year prior, revenues slightly increased by 1.4%. 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.
- The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.18, which illustrates the ability to avoid short-term cash problems.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. 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.
- DR REDDY'S LABORATORIES LTD's earnings per share declined by 15.0% in the most recent quarter compared to 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, DR REDDY'S LABORATORIES LTD increased its bottom line by earning $2.10 versus $1.79 in the prior year. This year, the market expects an improvement in earnings ($2.18 versus $2.10).
- You can view the full Dr Reddy Laboratories Ratings Report.
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.
null