Trade-Ideas LLC identified

PharMerica

(

PMC

) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified PharMerica as such a stock due to the following factors:

  • PMC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.4 million.
  • PMC has traded 164,649 shares today.
  • PMC is trading at 17.58 times the normal volume for the stock at this time of day.
  • PMC is trading at a new high 7.03% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. 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. 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 PMC:

PharMerica Corporation operates as an institutional pharmacy services company in the United States. The company offers services to healthcare facilities; pharmacy management services to hospitals; specialty infusion services to patients outside hospitals; and oncology pharmacy services. Currently there are 4 analysts that rate PharMerica a buy, 1 analyst rates it a sell, and none rate it a hold.

The average volume for PharMerica has been 275,200 shares per day over the past 30 days. PharMerica has a market cap of $941.7 million and is part of the services sector and wholesale industry. The stock has a beta of 0.96 and a short float of 2.4% with 1.91 days to cover. Shares are down 35.8% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates PharMerica as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, solid stock price performance and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.8%. Since the same quarter one year prior, revenues slightly increased by 6.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.68, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.47, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has significantly increased by 90.35% to $37.50 million when compared to the same quarter last year. In addition, PHARMERICA CORP has also vastly surpassed the industry average cash flow growth rate of 9.34%.
  • Compared to its closing price of one year ago, PMC's share price has jumped by 27.50%, exceeding the performance of the broader market during that same time frame. 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.
  • PHARMERICA CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, PHARMERICA CORP reported lower earnings of $0.22 versus $0.63 in the prior year. This year, the market expects an improvement in earnings ($1.63 versus $0.22).

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