Aetna (AET) Showing Signs Of Being A Roof Leaker
Trade-Ideas LLC identified
(
) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Aetna as such a stock due to the following factors:
- AET has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $246.0 million.
- AET has traded 1.0 million shares today.
- AET is trading at 1.62 times the normal volume for the stock at this time of day.
- AET crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in AET with the Ticky from Trade-Ideas. See the FREE profile for AET NOW at Trade-Ideas
More details on AET:
Aetna Inc. operates as a health care benefits company in the United States. It operates through three segments: Health Care, Group Insurance, and Large Case Pensions. The stock currently has a dividend yield of 0.9%. AET has a PE ratio of 17. Currently there are 10 analysts that rate Aetna a buy, 1 analyst rates it a sell, and 5 rate it a hold.
The average volume for Aetna has been 2.3 million shares per day over the past 30 days. Aetna has a market cap of $40.1 billion and is part of the health care sector and health services industry. The stock has a beta of 0.43 and a short float of 4.3% with 6.13 days to cover. Shares are up 3.8% year-to-date as of the close of trading on Wednesday.
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.
Analysis:
rates Aetna as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 7.3%. Since the same quarter one year prior, revenues slightly increased by 4.0%. 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.
- Net operating cash flow has increased to $1,780.90 million or 20.87% when compared to the same quarter last year. In addition, AETNA INC has also modestly surpassed the industry average cash flow growth rate of 19.97%.
- The current debt-to-equity ratio, 0.46, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that AET's debt-to-equity ratio is low, the quick ratio, which is currently 0.67, displays a potential problem in covering short-term cash needs.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. 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.
- You can view the full Aetna Ratings Report.
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.
