Today's Dead Cat Bounce Stock: Molina Healthcare (MOH)

Trade-Ideas LLC identified Molina Healthcare (MOH) as a "dead cat bounce" (down big yesterday but up big today) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Molina Healthcare

(

MOH

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Molina Healthcare as such a stock due to the following factors:

  • MOH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $55.1 million.
  • MOH has traded 142,030 shares today.
  • MOH is up 3.1% today.
  • MOH was down 12.3% yesterday.

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More details on MOH:

Molina Healthcare, Inc. provides Medicaid-related solutions to meet the health care needs of low-income families and individuals; and to assist state agencies in their administration of the Medicaid program. The company operates through two segments, Health Plans and Molina Medicaid Solutions. MOH has a PE ratio of 23. Currently there are 7 analysts that rate Molina Healthcare a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Molina Healthcare has been 1.0 million shares per day over the past 30 days. Molina Healthcare has a market cap of $3.6 billion and is part of the health care sector and health services industry. The stock has a beta of 0.92 and a short float of 23.7% with 8.70 days to cover. Shares are up 3.9% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Molina Healthcare as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and solid stock price performance. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 10.2%. Since the same quarter one year prior, revenues rose by 45.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.61, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.10, which illustrates the ability to avoid short-term cash problems.
  • MOLINA HEALTHCARE INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MOLINA HEALTHCARE INC increased its bottom line by earning $1.28 versus $0.96 in the prior year. This year, the market expects an improvement in earnings ($2.69 versus $1.28).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 187.2% when compared to the same quarter one year prior, rising from $16.12 million to $46.30 million.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.

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