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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

Covance

(

CVD

) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Covance as such a stock due to the following factors:

  • CVD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $45.5 million.
  • CVD traded 95,736 shares today in the pre-market hours as of 8:48 AM, representing 21.2% of its average daily volume.

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More details on CVD:

Covance Inc., a drug development services company, provides a range of early-stage and late-stage product development services to the pharmaceutical and biotechnology industries worldwide. It operates in two segments, Early Development and Late-Stage Development. CVD has a PE ratio of 30.1. Currently there are 10 analysts that rate Covance a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for Covance has been 414,600 shares per day over the past 30 days. Covance has a market cap of $4.7 billion and is part of the health care sector and health services industry. The stock has a beta of 0.79 and a short float of 3.3% with 3.69 days to cover. Shares are down 9.9% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Covance as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • CVD's revenue growth trails the industry average of 21.1%. Since the same quarter one year prior, revenues slightly increased by 6.7%. 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.
  • CVD's debt-to-equity ratio is very low at 0.18 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, CVD has a quick ratio of 2.18, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has increased to $68.03 million or 32.14% when compared to the same quarter last year. In addition, COVANCE INC has also modestly surpassed the industry average cash flow growth rate of 24.31%.
  • COVANCE INC 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. 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, COVANCE INC increased its bottom line by earning $3.16 versus $1.67 in the prior year. This year, the market expects an improvement in earnings ($3.85 versus $3.16).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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