Water-Logged And Getting Wetter Stock Of The Day: CVS Health (CVS)
Trade-Ideas LLC identified
(
) 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 CVS Health as such a stock due to the following factors:
- CVS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $339.8 million.
- CVS has traded 3.7 million shares today.
- CVS traded in a range 223.7% of the normal price range with a price range of $2.22.
- CVS traded below its daily resistance level (quality: 26 days, meaning that the stock is crossing a resistance level set by the last 26 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 CVS:
CVS Health Corporation, together with its subsidiaries, provides integrated pharmacy health care services. It operates through Pharmacy Services and Retail/LTC segments. The stock currently has a dividend yield of 1.8%. CVS has a PE ratio of 21. Currently there are 16 analysts that rate CVS Health a buy, no analysts rate it a sell, and 4 rate it a hold.
The average volume for CVS Health has been 5.1 million shares per day over the past 30 days. CVS Health has a market cap of $104.1 billion and is part of the health care sector and health services industry. The stock has a beta of 0.97 and a short float of 1.3% with 3.41 days to cover. Shares are down 1.2% year-to-date as of the close of trading on Friday.
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Analysis:
rates CVS Health as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, notable return on equity and reasonable valuation levels. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 1.5%. Since the same quarter one year prior, revenues rose by 18.9%. 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.
- CVS HEALTH CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CVS HEALTH CORP increased its bottom line by earning $4.63 versus $3.96 in the prior year. This year, the market expects an improvement in earnings ($5.82 versus $4.63).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Food & Staples Retailing industry and the overall market on the basis of return on equity, CVS HEALTH CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- Net operating cash flow has increased to $2,412.00 million or 21.57% when compared to the same quarter last year. Despite an increase in cash flow, CVS HEALTH CORP's average is still marginally south of the industry average growth rate of 28.37%.
- You can view the full CVS Health Ratings Report.
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