Water-Logged And Getting Wetter: Laboratory Corp Of America Hldgs (LH)
Trade-Ideas LLC identified
Laboratory Corp of America Hldgs
(
) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Laboratory Corp of America Hldgs as such a stock due to the following factors:
- LH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $90.8 million.
- LH has traded 475,874 shares today.
- LH traded in a range 201.6% of the normal price range with a price range of $4.12.
- LH traded below its daily resistance level (quality: 2 days, meaning that the stock is crossing a resistance level set by the last 2 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.
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More details on LH:
Laboratory Corporation of America Holdings operates as an independent clinical laboratory company worldwide. LH has a PE ratio of 27. Currently there are 12 analysts that rate Laboratory Corp of America Hldgs a buy, no analysts rate it a sell, and 4 rate it a hold.
The average volume for Laboratory Corp of America Hldgs has been 1.1 million shares per day over the past 30 days. Laboratory Corp of America Hldgs has a market cap of $12.5 billion and is part of the health care sector and health services industry. The stock has a beta of 0.72 and a short float of 3.9% with 5.21 days to cover. Shares are up 15.1% year-to-date as of the close of trading on Wednesday.
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Analysis:
rates Laboratory Corp of America Hldgs as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, good cash flow from operations, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 10.2%. Since the same quarter one year prior, revenues rose by 49.3%. 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.
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Health Care Providers & Services industry average. The net income increased by 11.4% when compared to the same quarter one year prior, going from $137.20 million to $152.90 million.
- Net operating cash flow has significantly increased by 64.00% to $288.00 million when compared to the same quarter last year. In addition, LABORATORY CP OF AMER HLDGS has also vastly surpassed the industry average cash flow growth rate of 11.26%.
- 36.21% is the gross profit margin for LABORATORY CP OF AMER HLDGS which we consider to be strong. Regardless of LH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LH's net profit margin of 6.59% compares favorably to the industry average.
- LABORATORY CP OF AMER HLDGS's earnings per share declined by 6.3% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, LABORATORY CP OF AMER HLDGS reported lower earnings of $5.93 versus $6.24 in the prior year. This year, the market expects an improvement in earnings ($7.90 versus $5.93).
- You can view the full Laboratory Corp of America Hldgs Ratings Report.
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