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 momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Merck as such a stock due to the following factors:
- MRK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $444.7 million.
- MRK has a PE ratio of 38.3.
- MRK is currently in the upper 30% of its 1-year range.
- MRK is in the upper 25% of its 20-day range.
- MRK is in the upper 35% of its 5-day range.
- MRK is currently trading above yesterday's high.
- MRK has experienced a gap between today's open and yesterday's close of 1.5%.
'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.
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More details on MRK:
Merck & Co., Inc. provides various health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products worldwide. The stock currently has a dividend yield of 3%. MRK has a PE ratio of 38.3. Currently there are 6 analysts that rate Merck a buy, no analysts rate it a sell, and 6 rate it a hold.
The average volume for Merck has been 9.0 million shares per day over the past 30 days. Merck has a market cap of $169.9 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.47 and a short float of 1% with 4.52 days to cover. Shares are up 15.8% year-to-date as of the close of trading on Monday.
rates Merck as a
. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Pharmaceuticals industry average. The net income increased by 7.0% when compared to the same quarter one year prior, going from $1,593.00 million to $1,705.00 million.
- The current debt-to-equity ratio, 0.56, 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 1.23, which illustrates the ability to avoid short-term cash problems.
- The gross profit margin for MERCK & CO is currently very high, coming in at 89.02%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 16.61% trails the industry average.
- Net operating cash flow has remained constant at $2,361.00 million with no significant change when compared to the same quarter last year. Even though MERCK & CO's cash flow growth was minimal, the firm managed to surpass its industry's average growth rate of -54.80%.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- You can view the full Merck Ratings Report.