Eyes On AbbVie (ABBV): Highlighted Storm The Castle Stock

Trade-Ideas LLC identified AbbVie (ABBV) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

AbbVie

(

ABBV

) 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 AbbVie as such a stock due to the following factors:

  • ABBV has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $1.1 billion.
  • ABBV has traded 5.0 million shares today.
  • ABBV is trading at 2.05 times the normal volume for the stock at this time of day.
  • ABBV 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.

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More details on ABBV:

AbbVie Inc. discovers, develops, manufactures, and sells pharmaceutical products worldwide. The stock currently has a dividend yield of 3.8%. ABBV has a PE ratio of 42. Currently there are 10 analysts that rate AbbVie a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for AbbVie has been 11.1 million shares per day over the past 30 days. AbbVie has a market cap of $89.6 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.58 and a short float of 2.2% with 2.04 days to cover. Shares are down 9% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates AbbVie as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and generally higher debt management risk.

Highlights from the ratings report include:

  • ABBV's revenue growth has slightly outpaced the industry average of 5.2%. Since the same quarter one year prior, revenues rose by 11.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Biotechnology industry average. The net income increased by 24.4% when compared to the same quarter one year prior, going from $1,098.00 million to $1,366.00 million.
  • ABBVIE INC has improved earnings per share by 22.1% 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, ABBVIE INC reported lower earnings of $1.09 versus $2.56 in the prior year. This year, the market expects an improvement in earnings ($4.24 versus $1.09).
  • ABBV has underperformed the S&P 500 Index, declining 9.81% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The debt-to-equity ratio is very high at 5.65 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, ABBV's quick ratio is somewhat strong at 1.12, demonstrating the ability to handle short-term liquidity needs.

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