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 strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Covance as such a stock due to the following factors:
- CVD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $61.3 million.
- CVD is making at least a new 3-day high.
- CVD has a PE ratio of 32.8.
- CVD is mentioned 1.68 times per day on StockTwits.
- CVD has not yet been mentioned on StockTwits today.
- CVD is currently in the upper 20% of its 1-year range.
- CVD is in the upper 35% of its 20-day range.
- CVD is in the upper 45% of its 5-day range.
- CVD is currently trading above yesterday's high.
'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.
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More details on CVD:
Covance Inc., a drug development services company, provides a range of early-stage and late-stage product development services to the pharmaceutical and biotechnology industries worldwide. It operates in two segments, Early Development and Late-Stage Development. CVD has a PE ratio of 32.8. Currently there is 1 analyst that rates Covance a buy, 1 analyst rates it a sell, and 12 rate it a hold.
The average volume for Covance has been 833,300 shares per day over the past 30 days. Covance has a market cap of $6.0 billion and is part of the health care sector and health services industry. The stock has a beta of 0.71 and a short float of 2.7% with 2.41 days to cover. Shares are up 2.5% year-to-date as of the close of trading on Tuesday.
rates Covance as a
. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- COVANCE INC has improved earnings per share by 13.8% 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, COVANCE INC increased its bottom line by earning $3.24 versus $3.16 in the prior year. This year, the market expects an improvement in earnings ($4.27 versus $3.24).
- CVD's revenue growth trails the industry average of 16.4%. Since the same quarter one year prior, revenues slightly increased by 0.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- CVD's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, CVD has a quick ratio of 2.26, which demonstrates the ability of the company to cover short-term liquidity needs.
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- You can view the full Covance Ratings Report.