Trade-Ideas LLC identified

Mednax

(

MD

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

  • MD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $48.5 million.
  • MD has traded 267,889 shares today.
  • MD traded in a range 200.2% of the normal price range with a price range of $3.74.
  • MD traded below its daily resistance level (quality: 12 days, meaning that the stock is crossing a resistance level set by the last 12 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 MD:

MEDNAX, Inc., together with its subsidiaries, provides neonatal, anesthesia, maternal-fetal, and other pediatric subspecialties physician services in the United States and Puerto Rico. MD has a PE ratio of 24. Currently there are 11 analysts that rate Mednax a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Mednax has been 727,700 shares per day over the past 30 days. Mednax 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 0.83 and a short float of 4.3% with 6.35 days to cover. Shares are up 24.1% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Mednax 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, notable return on equity, solid stock price performance and growth in earnings per share. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • MD's revenue growth has slightly outpaced the industry average of 9.8%. Since the same quarter one year prior, revenues rose by 13.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.58, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.45, which illustrates the ability to avoid short-term cash problems.
  • 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. Compared to other companies in the Health Care Providers & Services industry and the overall market, MEDNAX INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 54.56% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MD should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • MEDNAX INC has improved earnings per share by 13.9% 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, MEDNAX INC increased its bottom line by earning $3.17 versus $2.78 in the prior year. This year, the market expects an improvement in earnings ($4.10 versus $3.17).

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