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 "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 Catamaran as such a stock due to the following factors:
- CTRX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $68.5 million.
- CTRX has traded 1.9 million shares today.
- CTRX traded in a range 223.1% of the normal price range with a price range of $3.40.
- CTRX traded below its daily resistance level (quality: 69 days, meaning that the stock is crossing a resistance level set by the last 69 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.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in CTRX with the Ticky from Trade-Ideas. See the FREE profile for CTRX NOW at Trade-Ideas
More details on CTRX:
Catamaran Corporation provides pharmacy benefit management (PBM) services and healthcare information technology (HCIT) solutions to the healthcare benefits management industry in North America. The company operates in two segments: PBM and HCIT. CTRX has a PE ratio of 65.1. Currently there are 13 analysts that rate Catamaran a buy, no analysts rate it a sell, and 3 rate it a hold.
The average volume for Catamaran has been 1.3 million shares per day over the past 30 days. Catamaran has a market cap of $11.4 billion and is part of the health care sector and health services industry. The stock has a beta of 0.03 and a short float of 1.7% with 1.85 days to cover. Shares are up 7.9% year to date as of the close of trading on Thursday.
rates Catamaran as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, compelling growth in net income and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- CTRX's very impressive revenue growth greatly exceeded the industry average of 3.8%. Since the same quarter one year prior, revenues leaped by 100.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- CTRX's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.18, which illustrates the ability to avoid short-term cash problems.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 132.2% when compared to the same quarter one year prior, rising from $27.31 million to $63.42 million.
- Net operating cash flow has significantly increased by 481.78% to $172.95 million when compared to the same quarter last year. In addition, CATAMARAN CORP has also vastly surpassed the industry average cash flow growth rate of -28.97%.
- CATAMARAN CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, CATAMARAN CORP's EPS of $0.73 remained unchanged from the prior years' EPS of $0.73. This year, the market expects an improvement in earnings ($1.90 versus $0.73).
- You can view the full Catamaran Ratings Report.