Trade-Ideas LLC identified

Regeneron Pharmaceuticals

(

REGN

) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Regeneron Pharmaceuticals as such a stock due to the following factors:

  • REGN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $412.1 million.
  • REGN has traded 165,699 shares today.
  • REGN is trading at 3.42 times the normal volume for the stock at this time of day.
  • REGN crossed below its 200-day simple moving average.

'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.

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More details on REGN:

Regeneron Pharmaceuticals, Inc., a biopharmaceutical company, discovers, invents, develops, manufactures, and commercializes medicines for the treatment of serious medical conditions worldwide. REGN has a PE ratio of 132. Currently there are 10 analysts that rate Regeneron Pharmaceuticals a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for Regeneron Pharmaceuticals has been 737,500 shares per day over the past 30 days. Regeneron has a market cap of $53.1 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.13 and a short float of 4.5% with 3.89 days to cover. Shares are up 19.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Regeneron Pharmaceuticals as a

buy

. 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, increase in net income, solid stock price performance and growth in earnings per share. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • REGN's very impressive revenue growth greatly exceeded the industry average of 8.9%. Since the same quarter one year prior, revenues leaped by 50.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • REGN's debt-to-equity ratio is very low at 0.12 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 3.32, which clearly demonstrates the ability to cover short-term cash needs.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Biotechnology industry. The net income increased by 102.0% when compared to the same quarter one year prior, rising from $96.35 million to $194.64 million.
  • Powered by its strong earnings growth of 98.82% and other important driving factors, this stock has surged by 43.24% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • REGENERON PHARMACEUTICALS 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, REGENERON PHARMACEUTICALS reported lower earnings of $3.12 versus $3.80 in the prior year. This year, the market expects an improvement in earnings ($12.25 versus $3.12).

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