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 Laboratory Corporation 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 $66.6 million.
- LH has traded 338,076 shares today.
- LH traded in a range 324.7% of the normal price range with a price range of $4.58.
- LH 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 LH:
Laboratory Corporation of America Holdings operates as an independent clinical laboratory company worldwide. LH has a PE ratio of 16.6. Currently there are 3 analysts that rate Laboratory Corporation of America Holdings a buy, 2 analysts rate it a sell, and 11 rate it a hold.
The average volume for Laboratory Corporation of America Holdings has been 652,800 shares per day over the past 30 days. Laboratory Corporation of America has a market cap of $8.9 billion and is part of the health care sector and health services industry. The stock has a beta of 0.85 and a short float of 10.1% with 14.02 days to cover. Shares are up 14.5% year to date as of the close of trading on Friday.
rates Laboratory Corporation of America Holdings as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in stock price during the past year, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 3.9%. Since the same quarter one year prior, revenues slightly increased by 3.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- LABORATORY CP OF AMER HLDGS'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, LABORATORY CP OF AMER HLDGS increased its bottom line by earning $5.98 versus $5.08 in the prior year. This year, the market expects an improvement in earnings ($7.06 versus $5.98).
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- 41.80% is the gross profit margin for LABORATORY CP OF AMER HLDGS which we consider to be strong. Regardless of LH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LH's net profit margin of 10.35% compares favorably to the industry average.
- LH's debt-to-equity ratio of 0.94 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.42 is sturdy.
- You can view the full Laboratory Corporation of America Holdings Ratings Report.