Trade-Ideas LLC identified

Kindred Healthcare

(

KND

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Kindred Healthcare as such a stock due to the following factors:

  • KND has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $16.0 million.
  • KND has traded 56,876 shares today.
  • KND is down 8.1% today.
  • KND was up 21.3% yesterday.

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More details on KND:

Kindred Healthcare, Inc. provides healthcare services in the United States. It operates in four divisions: Hospital, Nursing Center, Rehabilitation, and Care Management. The stock currently has a dividend yield of 5.3%. Currently there are 2 analysts that rate Kindred Healthcare a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Kindred Healthcare has been 1.2 million shares per day over the past 30 days. Kindred Healthcare has a market cap of $762.6 million and is part of the health care sector and health services industry. The stock has a beta of 1.15 and a short float of 9.7% with 5.09 days to cover. Shares are down 24.2% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Kindred Healthcare as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, generally high debt management risk and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Health Care Providers & Services industry. The net income has significantly decreased by 234.7% when compared to the same quarter one year ago, falling from -$4.36 million to -$14.60 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Health Care Providers & Services industry and the overall market, KINDRED HEALTHCARE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for KINDRED HEALTHCARE INC is currently lower than what is desirable, coming in at 25.03%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.82% trails that of the industry average.
  • The debt-to-equity ratio is very high at 2.17 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, KND's quick ratio is somewhat strong at 1.29, demonstrating the ability to handle short-term liquidity needs.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 51.79%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 600.00% compared to the year-earlier 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.

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