Trade-Ideas LLC identified

Molina Healthcare

(

MOH

) 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 Molina Healthcare as such a stock due to the following factors:

  • MOH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $51.5 million.
  • MOH has traded 87,894 shares today.
  • MOH traded in a range 303.6% of the normal price range with a price range of $3.17.
  • MOH traded above its daily resistance level (quality: 90 days, meaning that the stock is crossing a resistance level set by the last 90 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 MOH:

Molina Healthcare, Inc. provides Medicaid-related solutions to meet the health care needs of low-income families and individuals; and to assist state agencies in their administration of the Medicaid program. MOH has a PE ratio of 22. Currently there are 5 analysts that rate Molina Healthcare a buy, 1 analyst rates it a sell, and 7 rate it a hold.

The average volume for Molina Healthcare has been 1.2 million shares per day over the past 30 days. Molina Healthcare has a market cap of $3.0 billion and is part of the health care sector and health services industry. The stock has a beta of 0.95 and a short float of 18.9% with 7.17 days to cover. Shares are down 13.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Molina Healthcare as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth and notable return on equity. 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 11.8%. Since the same quarter one year prior, revenues rose by 37.0%. 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.
  • MOLINA HEALTHCARE INC's earnings per share declined by 23.2% in the most recent quarter compared to the same quarter a year ago. 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, MOLINA HEALTHCARE INC increased its bottom line by earning $2.57 versus $1.28 in the prior year. This year, the market expects an improvement in earnings ($2.70 versus $2.57).
  • 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. When compared to other companies in the Health Care Providers & Services industry and the overall market, MOLINA HEALTHCARE INC's return on equity is below that of both the industry average and the S&P 500.
  • The debt-to-equity ratio of 1.02 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, MOH's quick ratio is somewhat strong at 1.17, demonstrating the ability to handle short-term liquidity needs.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Health Care Providers & Services industry average. The net income has decreased by 14.8% when compared to the same quarter one year ago, dropping from $28.15 million to $24.00 million.

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