Trade-Ideas LLC identified

Laboratory Corp of America Holdings

(

LH

) 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 Laboratory Corp of America Holdings as such a stock due to the following factors:

  • LH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $101.0 million.
  • LH has traded 94,154 shares today.
  • LH traded in a range 205.7% of the normal price range with a price range of $3.00.
  • LH traded below its daily resistance level (quality: 6 days, meaning that the stock is crossing a resistance level set by the last 6 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 LH:

Laboratory Corporation of America Holdings operates as an independent clinical laboratory company worldwide. It operates through two segments, LabCorp Diagnostics and Covance Drug Development. LH has a PE ratio of 24. Currently there are 12 analysts that rate Laboratory Corp of America Holdings a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Laboratory Corp of America Holdings has been 859,400 shares per day over the past 30 days. Laboratory Corp of America has a market cap of $14.1 billion and is part of the health care sector and health services industry. The stock has a beta of 0.82 and a short float of 3% with 4.26 days to cover. Shares are up 11.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Laboratory Corp of America Holdings as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, good cash flow from operations, solid stock price performance and impressive record of earnings per share growth. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 11.8%. Since the same quarter one year prior, revenues rose by 32.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 5067.7% when compared to the same quarter one year prior, rising from $3.10 million to $160.20 million.
  • Net operating cash flow has significantly increased by 241.54% to $123.00 million when compared to the same quarter last year. In addition, LABORATORY CP OF AMER HLDGS has also vastly surpassed the industry average cash flow growth rate of 35.30%.
  • 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. Although other factors naturally played a role, the company's strong earnings growth was key. 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.
  • LABORATORY CP OF AMER HLDGS reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, LABORATORY CP OF AMER HLDGS reported lower earnings of $4.28 versus $5.93 in the prior year. This year, the market expects an improvement in earnings ($8.80 versus $4.28).

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