Trade-Ideas LLC identified

Allergan

(

AGN

) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Allergan as such a stock due to the following factors:

  • AGN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $1.3 billion.
  • AGN has traded 924,645 shares today.
  • AGN is trading at 5.38 times the normal volume for the stock at this time of day.
  • AGN is trading at a new high 5.08% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on AGN:

Allergan plc develops, manufactures, and distributes generic, branded, biosimilar, and over-the-counter (OTC) pharmaceutical products. It operates in three segments: North American Brands, North American Generics and International, and Anda Distribution. The stock currently has a dividend yield of 0.1%. Currently there are 15 analysts that rate Allergan a buy, 1 analyst rates it a sell, and none rate it a hold.

The average volume for Allergan has been 2.5 million shares per day over the past 30 days. Allergan has a market cap of $109.8 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.01 and a short float of 1.4% with 1.23 days to cover. Shares are down 2.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Allergan as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, expanding profit margins, 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:

  • AGN's very impressive revenue growth greatly exceeded the industry average of 6.7%. Since the same quarter one year prior, revenues leaped by 115.8%. 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 significantly increased by 157.87% to $1,401.30 million when compared to the same quarter last year. In addition, ALLERGAN PLC has also vastly surpassed the industry average cash flow growth rate of -10.20%.
  • The gross profit margin for ALLERGAN PLC is currently very high, coming in at 73.58%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -4.22% is in-line with the industry average.
  • The current debt-to-equity ratio, 0.59, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.78 is somewhat weak and could be cause for future problems.
  • 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. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.

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