Trade-Ideas LLC identified

Novo Nordisk A/S

(

NVO

) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Novo Nordisk A/S as such a stock due to the following factors:

  • NVO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $59.7 million.
  • NVO has traded 2.2 million shares today.
  • NVO is trading at 2.34 times the normal volume for the stock at this time of day.
  • NVO crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on NVO:

Novo Nordisk A/S, a healthcare company, engages in the discovery, development, manufacture, and marketing of pharmaceutical products worldwide. It operates in two segments, Diabetes and Obesity Care, and Biopharmaceuticals. The stock currently has a dividend yield of 1.3%. Currently there are 2 analysts that rate Novo Nordisk A/S a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Novo Nordisk A/S has been 1.3 million shares per day over the past 30 days. Novo Nordisk A/S has a market cap of $140.2 billion and is part of the health care sector and drugs industry. Shares are down 7.4% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Novo Nordisk A/S as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. 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 0.9%. Since the same quarter one year prior, revenues rose by 14.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Pharmaceuticals industry average. The net income increased by 1.8% when compared to the same quarter one year prior, going from $1,419.95 million to $1,445.17 million.
  • Net operating cash flow has significantly increased by 93.53% to $1,142.53 million when compared to the same quarter last year. In addition, NOVO NORDISK A/S has also vastly surpassed the industry average cash flow growth rate of -9.28%.
  • The gross profit margin for NOVO NORDISK A/S is currently very high, coming in at 84.44%. Regardless of NVO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NVO's net profit margin of 34.74% significantly outperformed against the industry.
  • NVO's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that NVO's debt-to-equity ratio is low, the quick ratio, which is currently 0.62, displays a potential problem in covering short-term cash needs.

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