Watch Out: Barbarians At The Gate For Incyte (INCY)
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
(
) 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 Incyte as such a stock due to the following factors:
- INCY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $114.0 million.
- INCY has traded 224,022 shares today.
- INCY traded in a range 205.2% of the normal price range with a price range of $5.94.
- INCY traded above its daily resistance level (quality: 6 days, meaning that the stock is crossing a resistance level set by the last 6 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 INCY:
Incyte Corporation, a biopharmaceutical company, focuses on the discovery, development, and commercialization of proprietary therapeutics primarily for oncology. Currently there are 11 analysts that rate Incyte a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for Incyte has been 1.2 million shares per day over the past 30 days. Incyte has a market cap of $15.5 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.16 and a short float of 8.6% with 7.80 days to cover. Shares are up 22% year-to-date as of the close of trading on Thursday.
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Analysis:
rates Incyte as a
. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and robust revenue growth. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.
Highlights from the ratings report include:
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 49.72% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- INCYTE CORP has improved earnings per share by 15.4% 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, INCYTE CORP continued to lose money by earning -$0.32 versus -$0.54 in the prior year. This year, the market expects an improvement in earnings (-$0.25 versus -$0.32).
- Despite its growing revenue, the company underperformed as compared with the industry average of 34.7%. Since the same quarter one year prior, revenues rose by 27.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Net operating cash flow has significantly increased by 482.58% to $44.72 million when compared to the same quarter last year. In addition, INCYTE CORP has also vastly surpassed the industry average cash flow growth rate of 49.09%.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Biotechnology industry average, but is greater than that of the S&P 500. The net income increased by 13.8% when compared to the same quarter one year prior, going from -$42.87 million to -$36.94 million.
- You can view the full Incyte Ratings Report.
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