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 momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Allergan as such a stock due to the following factors:
- AGN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $303.3 million.
- AGN has a PE ratio of 36.1.
- AGN is currently in the upper 30% of its 1-year range.
- AGN is in the upper 25% of its 20-day range.
- AGN is in the upper 35% of its 5-day range.
- AGN is currently trading above yesterday's high.
- AGN has experienced a gap between today's open and yesterday's close of 0.5%.
'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.
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More details on AGN:
Allergan, Inc. operates as a multi-specialty health care company primarily in the United States, Europe, Latin America, and the Asia Pacific. The stock currently has a dividend yield of 0.1%. AGN has a PE ratio of 36.1. Currently there are 6 analysts that rate Allergan a buy, 1 analyst rates it a sell, and 6 rate it a hold.
The average volume for Allergan has been 3.0 million shares per day over the past 30 days. Allergan has a market cap of $50.5 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.63 and a short float of 1.2% with 1.81 days to cover. Shares are up 53.9% year-to-date as of the close of trading on Tuesday.
rates Allergan as a
. 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, growth in earnings per share, compelling growth in net income and solid stock price performance. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 6.3%. Since the same quarter one year prior, revenues rose by 16.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 3.39, which clearly demonstrates the ability to cover short-term cash needs.
- ALLERGAN INC has improved earnings per share by 17.1% 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, ALLERGAN INC increased its bottom line by earning $4.20 versus $3.57 in the prior year. This year, the market expects an improvement in earnings ($5.79 versus $4.20).
- 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 15.9% when compared to the same quarter one year prior, going from $359.90 million to $417.20 million.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 88.64% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full Allergan Ratings Report.