Valeant Pharmaceuticals International (VRX) Highlighted As Momo Momentum 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.
Trade-Ideas LLC identified
Valeant Pharmaceuticals International
(
) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Valeant Pharmaceuticals International as such a stock due to the following factors:
- VRX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $858.6 million.
- VRX has a PE ratio of 76.2.
- VRX is currently in the upper 30% of its 1-year range.
- VRX is in the upper 25% of its 20-day range.
- VRX is in the upper 35% of its 5-day range.
- VRX is currently trading above yesterday's high.
- VRX has experienced a gap between today's open and yesterday's close of 1.3%.
'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.
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More details on VRX:
Valeant Pharmaceuticals International, Inc. develops, manufactures, and markets pharmaceuticals, over-the-counter products, and medical devices worldwide. VRX has a PE ratio of 76.2. Currently there are 9 analysts that rate Valeant Pharmaceuticals International a buy, no analysts rate it a sell, and 2 rate it a hold.
The average volume for Valeant Pharmaceuticals International has been 3.2 million shares per day over the past 30 days. Valeant Pharmaceuticals International has a market cap of $68.4 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.80 and a short float of 2.2% with 1.40 days to cover. Shares are up 41.2% year-to-date as of the close of trading on Thursday.
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Analysis:
rates Valeant Pharmaceuticals International as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 10.3%. Since the same quarter one year prior, revenues rose by 10.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- VALEANT PHARMACEUTICALS INTL 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, VALEANT PHARMACEUTICALS INTL turned its bottom line around by earning $2.67 versus -$2.62 in the prior year. This year, the market expects an improvement in earnings ($10.42 versus $2.67).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Pharmaceuticals industry. The net income increased by 332.2% when compared to the same quarter one year prior, rising from $123.77 million to $534.90 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Pharmaceuticals industry and the overall market, VALEANT PHARMACEUTICALS INTL's return on equity exceeds that of both the industry average and the S&P 500.
- The gross profit margin for VALEANT PHARMACEUTICALS INTL is currently very high, coming in at 76.68%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 23.46% significantly outperformed against the industry average.
- You can view the full Valeant Pharmaceuticals International Ratings Report.
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