Trade-Ideas LLC identified

United Therapeutics

(

UTHR

) 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 United Therapeutics as such a stock due to the following factors:

  • UTHR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $63.1 million.
  • UTHR has traded 348,201 shares today.
  • UTHR traded in a range 211.2% of the normal price range with a price range of $11.11.
  • UTHR traded below its daily resistance level (quality: 254 days, meaning that the stock is crossing a resistance level set by the last 254 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 UTHR:

United Therapeutics Corporation, a biotechnology company, develops and commercializes products to address the unmet medical needs of patients with chronic and life-threatening conditions worldwide. UTHR has a PE ratio of 43. Currently there are 5 analysts that rate United Therapeutics a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for United Therapeutics has been 552,100 shares per day over the past 30 days. United has a market cap of $6.5 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.54 and a short float of 16.8% with 13.83 days to cover. Shares are up 9% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates United Therapeutics as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations and expanding profit margins. We feel its 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 8.8%. Since the same quarter one year prior, revenues slightly increased by 7.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • UTHR's debt-to-equity ratio is very low at 0.03 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 1.12, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has significantly increased by 175.22% to $40.98 million when compared to the same quarter last year. In addition, UNITED THERAPEUTICS CORP has also vastly surpassed the industry average cash flow growth rate of 14.42%.
  • The gross profit margin for UNITED THERAPEUTICS CORP is currently very high, coming in at 97.79%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, UTHR's net profit margin of 28.57% significantly trails the industry average.

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