Edwards Lifesciences (EW) Stock Isn't Done Climbing
NEW YORK (TheStreet) -- The chart of Edwards Lifesciences (EW) - Get Report is pointed higher.
The price of EW has been grinding higher all year, chart above, with only a minor correction to the downside this summer. The On-Balance-Volume (OBV) line has been, and still is, pointed up, confirming the rally and foreshadowing further gains as shares of EW remain under accumulation. The 50-day and 200-day moving averages are bullishly aligned (50-day above the 200-day) and rising. Last, we see no bearish divergences between the price action and the momentum study that warrants concern.
When you look at this longer-term chart of EW, above, one can't help but be impressed. EW has had a big rally the past two years, but the indicators point to still further gains ahead. The 40-week moving average is in an uptrend and prices are above the average line. The OBV line is constructive and the Moving Average Convergence Divergence oscillator is rising. Traders could buy a breakout to a new high on EW, over $160, and then use a sell-stop below $149.
TheStreet Ratings team rates EDWARDS LIFESCIENCES CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
We rate EDWARDS LIFESCIENCES CORP (EW) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income increased by 24.8% when compared to the same quarter one year prior, going from $94.60 million to $118.10 million.
- The revenue growth significantly trails the industry average of 37.3%. Since the same quarter one year prior, revenues slightly increased by 1.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- EW's debt-to-equity ratio is very low at 0.25 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 2.98, which clearly demonstrates the ability to cover short-term cash needs.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 31.00% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, EW should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The gross profit margin for EDWARDS LIFESCIENCES CORP is currently very high, coming in at 79.17%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.18% is above that of the industry average.
- You can view the full analysis from the report here: EW
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.