Watch Out: Barbarians At The Gate For Community Health Systems (CYH)
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 Community Health Systems as such a stock due to the following factors:
- CYH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $97.2 million.
- CYH has traded 860,095 shares today.
- CYH traded in a range 201.4% of the normal price range with a price range of $2.74.
- CYH traded above its daily resistance level (quality: 49 days, meaning that the stock is crossing a resistance level set by the last 49 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 CYH:
Community Health Systems, Inc., together with its subsidiaries, provides general and specialized hospital healthcare services to patients in the United States. CYH has a PE ratio of 37.5. Currently there are 13 analysts that rate Community Health Systems a buy, no analysts rate it a sell, and 5 rate it a hold.
The average volume for Community Health Systems has been 1.6 million shares per day over the past 30 days. Community Health Systems has a market cap of $5.8 billion and is part of the health care sector and health services industry. The stock has a beta of 1.42 and a short float of 4.9% with 2.60 days to cover. Shares are down 8% year-to-date as of the close of trading on Tuesday.
Analysis:
rates Community Health Systems as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels, solid stock price performance, increase in net income and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- CYH's very impressive revenue growth greatly exceeded the industry average of 18.4%. Since the same quarter one year prior, revenues leaped by 52.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- 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 254.8% when compared to the same quarter one year prior, rising from $28.18 million to $100.00 million.
- Net operating cash flow has significantly increased by 50.70% to $976.00 million when compared to the same quarter last year. Despite an increase in cash flow of 50.70%, COMMUNITY HEALTH SYSTEMS INC is still growing at a significantly lower rate than the industry average of 105.25%.
- You can view the full Community Health Systems Ratings Report.
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