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Trade-Ideas LLC identified

IMS Health Holdings

(

IMS

) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified IMS Health Holdings as such a stock due to the following factors:

  • IMS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $37.3 million.
  • IMS has traded 1.8 million shares today.
  • IMS traded in a range 207.1% of the normal price range with a price range of $1.44.
  • IMS traded below its daily resistance level (quality: 10 days, meaning that the stock is crossing a resistance level set by the last 10 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on IMS:

TheStreet Recommends

IMS Health Holdings, Inc. provides information and technology services to healthcare industry worldwide. IMS has a PE ratio of 25. Currently there are 11 analysts that rate IMS Health Holdings a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for IMS Health Holdings has been 1.1 million shares per day over the past 30 days. IMS Health has a market cap of $9.5 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.13 and a short float of 4.1% with 2.47 days to cover. Shares are up 13.9% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates IMS Health Holdings as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and weak operating cash flow.

Highlights from the ratings report include:

  • IMS's revenue growth trails the industry average of 27.8%. Since the same quarter one year prior, revenues rose by 12.0%. 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 company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Health Care Technology industry and the overall market, IMS HEALTH HOLDINGS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The debt-to-equity ratio is very high at 2.69 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, IMS maintains a poor quick ratio of 0.88, which illustrates the inability to avoid short-term cash problems.
  • Net operating cash flow has decreased to $111.00 million or 42.18% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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