Mallinckrodt (MNK) Highlighted As Weak On High Volume
Trade-Ideas LLC identified
(
) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Mallinckrodt as such a stock due to the following factors:
- MNK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $275.6 million.
- MNK has traded 371,364 shares today.
- MNK is trading at 2.17 times the normal volume for the stock at this time of day.
- MNK is trading at a new low 3.00% below yesterday's close.
'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of 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 (or avoid losses by trimming weak positions). 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 MNK with the Ticky from Trade-Ideas. See the FREE profile for MNK NOW at Trade-Ideas
More details on MNK:
Mallinckrodt Public Limited Company develops, manufactures, markets, and distributes specialty pharmaceutical products and medical imaging agents worldwide. The company operates through two segments, Specialty Pharmaceuticals and Global Medical Imaging. Currently there are 9 analysts that rate Mallinckrodt a buy, no analysts rate it a sell, and 2 rate it a hold.
The average volume for Mallinckrodt has been 3.0 million shares per day over the past 30 days. Mallinckrodt has a market cap of $6.8 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.80 and a short float of 7% with 2.12 days to cover. Shares are down 36.8% year-to-date as of the close of trading on Tuesday.
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 Mallinckrodt as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, a generally disappointing performance in the stock itself and generally higher debt management risk.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 7.1%. Since the same quarter one year prior, revenues rose by 47.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Pharmaceuticals industry. The net income increased by 340.7% when compared to the same quarter one year prior, rising from -$24.10 million to $58.00 million.
- MALLINCKRODT PLC reported significant earnings per share improvement 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, MALLINCKRODT PLC swung to a loss, reporting -$3.57 versus $0.06 in the prior year. This year, the market expects an improvement in earnings ($7.31 versus -$3.57).
- The debt-to-equity ratio of 1.01 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, MNK's quick ratio is somewhat strong at 1.12, demonstrating the ability to handle short-term liquidity needs.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Pharmaceuticals industry and the overall market, MALLINCKRODT PLC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full Mallinckrodt 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.