Trade-Ideas LLC identified

Opko Health

(

OPK

) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Opko Health as such a stock due to the following factors:

  • OPK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $29.7 million.
  • OPK has traded 3.1 million shares today.
  • OPK traded in a range 235.1% of the normal price range with a price range of $1.02.
  • OPK traded above its daily resistance level (quality: 36 days, meaning that the stock is crossing a resistance level set by the last 36 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on OPK:

TST Recommends

OPKO Health, Inc., a biopharmaceutical and diagnostics company, engages in the discovery, development, and commercialization of novel and proprietary technologies in the United States and internationally. It operates through two segments, Pharmaceuticals and Diagnostics. Currently there are 3 analysts that rate Opko Health a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Opko Health has been 3.9 million shares per day over the past 30 days. Opko Health has a market cap of $4.3 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.82 and a short float of 30.3% with 19.94 days to cover. Shares are down 20.5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Opko Health as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • OPK's very impressive revenue growth greatly exceeded the industry average of 6.9%. Since the same quarter one year prior, revenues leaped by 623.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • OPK's debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.14, which illustrates the ability to avoid short-term cash problems.
  • OPKO HEALTH INC reported significant earnings per share improvement in the most recent quarter compared to 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, OPKO HEALTH INC reported poor results of -$0.40 versus -$0.33 in the prior year. This year, the market expects an improvement in earnings (-$0.09 versus -$0.40).
  • OPK's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 43.59%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • Net operating cash flow has decreased to -$31.36 million or 48.80% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, OPKO HEALTH INC has marginally lower results.

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