Universal Health Services (UHS) 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 or Stephanie Link.
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 Universal Health Services as such a stock due to the following factors:
- UHS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $80.2 million.
- UHS has traded 404,219 shares today.
- UHS traded in a range 242.4% of the normal price range with a price range of $5.91.
- UHS traded above its daily resistance level (quality: 531 days, meaning that the stock is crossing a resistance level set by the last 531 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 UHS:
Universal Health Services, Inc., through its subsidiaries, owns and operates acute care hospitals, behavioral health centers, surgical hospitals, ambulatory surgery centers, and radiation oncology centers. The stock currently has a dividend yield of 0.3%. UHS has a PE ratio of 21.1. Currently there are 13 analysts that rate Universal Health Services a buy, no analysts rate it a sell, and 3 rate it a hold.
The average volume for Universal Health Services has been 764,000 shares per day over the past 30 days. Universal Health Services has a market cap of $10.5 billion and is part of the health care sector and health services industry. The stock has a beta of 1.45 and a short float of 0.7% with 0.80 days to cover. Shares are up 1.3% year-to-date as of the close of trading on Tuesday.
Analysis:
rates Universal Health Services as a
. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- Powered by its strong earnings growth of 37.90% and other important driving factors, this stock has surged by 36.46% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, UHS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- UNIVERSAL HEALTH SVCS INC has improved earnings per share by 37.9% 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, UNIVERSAL HEALTH SVCS INC increased its bottom line by earning $5.42 versus $5.13 in the prior year. This year, the market expects an improvement in earnings ($6.44 versus $5.42).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Health Care Providers & Services industry average. The net income increased by 38.8% when compared to the same quarter one year prior, rising from $124.52 million to $172.80 million.
- 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 17.0%. 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 0.88, 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 1.11, which illustrates the ability to avoid short-term cash problems.
- You can view the full Universal Health Services Ratings Report.
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