Stryker Corporation (SYK) Shows Signs Of Being Water-Logged And Getting Wetter
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 or Stephanie Link.
Trade-Ideas LLC identified
(
) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Stryker Corporation as such a stock due to the following factors:
- SYK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $99.4 million.
- SYK has traded 1.2 million shares today.
- SYK traded in a range 255.1% of the normal price range with a price range of $2.76.
- SYK traded below its daily resistance level (quality: 18 days, meaning that the stock is crossing a resistance level set by the last 18 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.
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More details on SYK:
Stryker Corporation, together with its subsidiaries, operates as a medical technology company. The company operates through three segments: Orthopaedics, MedSurg, and Neurotechnology and Spine. The stock currently has a dividend yield of 1.5%. SYK has a PE ratio of 70.7. Currently there are 14 analysts that rate Stryker Corporation a buy, no analysts rate it a sell, and 7 rate it a hold.
The average volume for Stryker Corporation has been 1.2 million shares per day over the past 30 days. Stryker has a market cap of $35.9 billion and is part of the health care sector and health services industry. The stock has a beta of 1.24 and a short float of 1.1% with 3.43 days to cover. Shares are up 1.8% year-to-date as of the close of trading on Monday.
Analysis:
rates Stryker Corporation 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, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- SYK's revenue growth has slightly outpaced the industry average of 0.9%. Since the same quarter one year prior, revenues slightly increased by 6.1%. 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, 0.46, 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 1.47, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has remained constant at $675.00 million with no significant change when compared to the same quarter last year. Along with maintaining stable cash flow from operations, the firm exceeded the industry average cash flow growth rate of -21.69%.
- The gross profit margin for STRYKER CORP is rather high; currently it is at 67.99%. Regardless of SYK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 9.93% trails the industry average.
- STRYKER CORP's earnings per share declined by 33.7% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, STRYKER CORP reported lower earnings of $1.34 versus $2.63 in the prior year. This year, the market expects an improvement in earnings ($5.00 versus $1.34).
- You can view the full Stryker Corporation Ratings Report.
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