NuVasive (NUVA) Marked As A Barbarian At The Gate
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 "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified NuVasive as such a stock due to the following factors:
- NUVA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $20.0 million.
- NUVA has traded 199,102 shares today.
- NUVA traded in a range 295.6% of the normal price range with a price range of $2.95.
- NUVA traded above its daily resistance level (quality: 3 days, meaning that the stock is crossing a resistance level set by the last 3 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.
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More details on NUVA:
NuVasive, Inc., a medical device company, develops and markets minimally-disruptive surgical products and procedurally-integrated solutions for the spine. Its products focus on applications for spine fusion surgery. Currently there are 11 analysts that rate NuVasive a buy, no analysts rate it a sell, and 4 rate it a hold.
The average volume for NuVasive has been 391,300 shares per day over the past 30 days. NuVasive has a market cap of $2.2 billion and is part of the health care sector and health services industry. The stock has a beta of 0.37 and a short float of 6.4% with 5.97 days to cover. Shares are down 5.2% year-to-date as of the close of trading on Monday.
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Analysis:
rates NuVasive 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 and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow.
Highlights from the ratings report include:
- NUVA's revenue growth has slightly outpaced the industry average of 1.0%. Since the same quarter one year prior, revenues slightly increased by 7.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The current debt-to-equity ratio, 0.57, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, NUVA has a quick ratio of 2.24, which demonstrates the ability of the company to cover short-term liquidity needs.
- NUVASIVE INC has improved earnings per share by 15.4% 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, NUVASIVE INC swung to a loss, reporting -$0.38 versus $0.16 in the prior year. This year, the market expects an improvement in earnings ($1.10 versus -$0.38).
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, NUVASIVE INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $19.06 million or 30.18% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full NuVasive Ratings Report.
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