Trade-Ideas: AmerisourceBergen (ABC) Is Today's New Lifetime High Stock
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 new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified AmerisourceBergen as such a stock due to the following factors:
- ABC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $171.9 million.
- ABC has traded 37,852 shares today.
- ABC is trading at a new lifetime high.
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More details on ABC:
AmerisourceBergen Corporation sources and distributes pharmaceutical products to healthcare providers, pharmaceutical and biotech manufacturers, and specialty drug patients in the United States and internationally. The stock currently has a dividend yield of 1.1%. ABC has a PE ratio of 1148.2. Currently there are 6 analysts that rate AmerisourceBergen a buy, no analysts rate it a sell, and 8 rate it a hold.
The average volume for AmerisourceBergen has been 1.8 million shares per day over the past 30 days. AmerisourceBergen has a market cap of $22.7 billion and is part of the services sector and wholesale industry. The stock has a beta of 0.73 and a short float of 3.7% with 4.51 days to cover. Shares are up 14.2% year-to-date as of the close of trading on Tuesday.
Analysis:
rates AmerisourceBergen as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 18.4%. Since the same quarter one year prior, revenues rose by 15.1%. 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.
- Net operating cash flow has significantly increased by 189.37% to $896.96 million when compared to the same quarter last year. In addition, AMERISOURCEBERGEN CORP has also vastly surpassed the industry average cash flow growth rate of 113.25%.
- Compared to its closing price of one year ago, ABC's share price has jumped by 50.44%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Health Care Providers & Services industry and the overall market, AMERISOURCEBERGEN CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for AMERISOURCEBERGEN CORP is currently extremely low, coming in at 2.24%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.59% trails that of the industry average.
- You can view the full AmerisourceBergen Ratings Report.
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