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

Henry Schein

(

HSIC

) 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 Henry Schein as such a stock due to the following factors:

  • HSIC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $48.4 million.
  • HSIC has traded 302,839 shares today.
  • HSIC traded in a range 224.6% of the normal price range with a price range of $3.80.
  • HSIC traded below its daily resistance level (quality: 1 day, meaning that the stock is crossing a resistance level set by the last 1 calendar day. 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 HSIC:

Henry Schein, Inc. provides health care products and services worldwide. It operates in two segments, Health Care Distribution; and Technology and Value-Added Services. HSIC has a PE ratio of 27. Currently there are 6 analysts that rate Henry Schein a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for Henry Schein has been 406,600 shares per day over the past 30 days. Henry Schein has a market cap of $12.3 billion and is part of the services sector and wholesale industry. The stock has a beta of 0.94 and a short float of 2.6% with 6.54 days to cover. Shares are up 9.9% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Henry Schein as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, good cash flow from operations, growth in earnings per share and increase in net income. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • HSIC's revenue growth trails the industry average of 12.3%. Since the same quarter one year prior, revenues slightly increased by 1.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Health Care Providers & Services industry and the overall market, SCHEIN (HENRY) INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 51.75% to -$26.65 million when compared to the same quarter last year. In addition, SCHEIN (HENRY) INC has also vastly surpassed the industry average cash flow growth rate of -14.36%.
  • SCHEIN (HENRY) INC's earnings per share improvement from the most recent quarter was slightly positive. 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, SCHEIN (HENRY) INC increased its bottom line by earning $5.43 versus $4.92 in the prior year. This year, the market expects an improvement in earnings ($5.93 versus $5.43).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Health Care Providers & Services industry average. The net income increased by 1.3% when compared to the same quarter one year prior, going from $102.10 million to $103.45 million.

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