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.
Trade-Ideas LLC identified
) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Cardinal Health as such a stock due to the following factors:
- CAH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $232.5 million.
- CAH has traded 1.8 million shares today.
- CAH is trading at 2.43 times the normal volume for the stock at this time of day.
- CAH crossed above its 200-day simple moving average.
'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. 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 on. 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 CAH:
Cardinal Health, Inc., a healthcare services company, provides pharmaceutical and medical products and services in the United States and internationally. The company operates in two segments, Pharmaceutical and Medical. The stock currently has a dividend yield of 1.8%. CAH has a PE ratio of 25. Currently there are 12 analysts that rate Cardinal Health a buy, no analysts rate it a sell, and 3 rate it a hold.
The average volume for Cardinal Health has been 2.3 million shares per day over the past 30 days. Cardinal Health has a market cap of $27.9 billion and is part of the services sector and wholesale industry. The stock has a beta of 0.50 and a short float of 2.3% with 2.49 days to cover. Shares are up 3.2% year-to-date as of the close of trading on Thursday.
rates Cardinal Health as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, notable return on equity and solid stock price performance. We feel its strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- CAH's revenue growth has slightly outpaced the industry average of 12.3%. Since the same quarter one year prior, revenues rose by 18.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- CARDINAL HEALTH INC has improved earnings per share by 19.8% 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, CARDINAL HEALTH INC increased its bottom line by earning $3.37 versus $0.95 in the prior year. This year, the market expects an improvement in earnings ($4.36 versus $3.37).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Health Care Providers & Services industry average. The net income increased by 15.9% when compared to the same quarter one year prior, going from $315.00 million to $365.00 million.
- 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 Providers & Services industry and the overall market, CARDINAL HEALTH INC's return on equity exceeds that of both the industry average and the S&P 500.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Looking ahead, the stock's 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 the other strengths this company displays justify these higher price levels.
- You can view the full Cardinal Health Ratings Report.