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 "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Edwards Life as such a stock due to the following factors:
- EW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $70.9 million.
- EW has traded 949,016 shares today.
- EW traded in a range 218.3% of the normal price range with a price range of $2.36.
- EW traded below its daily resistance level (quality: 24 days, meaning that the stock is crossing a resistance level set by the last 24 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.
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More details on EW:
Edwards Lifesciences Corporation provides products and technologies to treat structural heart disease and critically ill patients worldwide. EW has a PE ratio of 20.3. Currently there are 9 analysts that rate Edwards Life a buy, no analysts rate it a sell, and 8 rate it a hold.
The average volume for Edwards Life has been 1.1 million shares per day over the past 30 days. Edwards Life has a market cap of $7.8 billion and is part of the health care sector and health services industry. The stock has a beta of 0.75 and a short float of 3.7% with 3.35 days to cover. Shares are down 22.7% year to date as of the close of trading on Friday.
rates Edwards Life as a
. 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, notable return on equity, expanding profit margins and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 26.1%. Since the same quarter one year prior, revenues slightly increased by 7.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- EW's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.92, which clearly demonstrates the ability to cover short-term cash needs.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, EDWARDS LIFESCIENCES CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for EDWARDS LIFESCIENCES CORP is currently very high, coming in at 78.94%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 18.19% is above that of the industry average.
- EDWARDS LIFESCIENCES CORP has improved earnings per share by 43.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, EDWARDS LIFESCIENCES CORP increased its bottom line by earning $2.47 versus $1.97 in the prior year. This year, the market expects an improvement in earnings ($3.07 versus $2.47).
- You can view the full Edwards Life Ratings Report.