Trade-Ideas LLC identified

Medicines

(

MDCO

) 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 Medicines as such a stock due to the following factors:

  • MDCO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $47.1 million.
  • MDCO has traded 325,134 shares today.
  • MDCO traded in a range 298% of the normal price range with a price range of $4.05.
  • MDCO traded above its daily resistance level (quality: 31 days, meaning that the stock is crossing a resistance level set by the last 31 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 MDCO:

TheStreet Recommends

The Medicines Company provides medicines for patients in acute and intensive care hospitals worldwide. Currently there are 7 analysts that rate Medicines a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Medicines has been 1.0 million shares per day over the past 30 days. Medicines has a market cap of $2.4 billion and is part of the health care sector and drugs industry. The stock has a beta of -0.05 and a short float of 32.4% with 10.25 days to cover. Shares are down 6.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Medicines as a

hold

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:

  • After a year of stock price fluctuations, the net result is that MDCO's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • MDCO, with its very weak revenue results, has greatly underperformed against the industry average of 1.3%. Since the same quarter one year prior, revenues plummeted by 54.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • MEDICINES CO has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, MEDICINES CO reported poor results of -$3.30 versus -$0.50 in the prior year. For the next year, the market is expecting a contraction of 39.4% in earnings (-$4.60 versus -$3.30).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Pharmaceuticals industry. The net income has significantly decreased by 1936.5% when compared to the same quarter one year ago, falling from $5.03 million to -$92.45 million.

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