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 or Stephanie Link.
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 Baxter International as such a stock due to the following factors:
- BAX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $179.0 million.
- BAX has traded 1.8 million shares today.
- BAX traded in a range 202.2% of the normal price range with a price range of $1.42.
- BAX traded above its daily resistance level (quality: 42 days, meaning that the stock is crossing a resistance level set by the last 42 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 BAX:
Baxter International Inc. develops, manufactures, and markets products for people with hemophilia, immune disorders, infectious diseases, kidney diseases, trauma, and other chronic and acute medical conditions. The stock currently has a dividend yield of 2.9%. BAX has a PE ratio of 19.7. Currently there are 4 analysts that rate Baxter International a buy, no analysts rate it a sell, and 10 rate it a hold.
The average volume for Baxter International has been 2.6 million shares per day over the past 30 days. Baxter International has a market cap of $39.2 billion and is part of the health care sector and health services industry. The stock has a beta of 0.54 and a short float of 1.7% with 3.75 days to cover. Shares are up 6% year-to-date as of the close of trading on Tuesday.
rates Baxter International as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 3.6%. Since the same quarter one year prior, revenues rose by 14.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the Health Care Equipment & Supplies industry average, but is less than that of the S&P 500. The net income increased by 0.7% when compared to the same quarter one year prior, going from $552.00 million to $556.00 million.
- Net operating cash flow has increased to $559.00 million or 44.81% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 7.63%.
- The gross profit margin for BAXTER INTERNATIONAL INC is rather high; currently it is at 55.91%. Regardless of BAX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BAX's net profit margin of 14.07% compares favorably to the industry average.
- BAXTER INTERNATIONAL INC's earnings per share improvement from the most recent quarter was slightly positive. 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, BAXTER INTERNATIONAL INC reported lower earnings of $3.65 versus $4.18 in the prior year. This year, the market expects an improvement in earnings ($5.15 versus $3.65).
- You can view the full Baxter International Ratings Report.