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
) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified PerkinElmer as such a stock due to the following factors:
- PKI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $47.5 million.
- PKI has traded 237,096 shares today.
- PKI traded in a range 200.5% of the normal price range with a price range of $1.54.
- PKI traded above its daily resistance level (quality: 15 days, meaning that the stock is crossing a resistance level set by the last 15 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.
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More details on PKI:
PerkinElmer, Inc. provides products, services, and solutions to the diagnostics, research, environmental, industrial, and laboratory services markets worldwide. The company operates through two segments, Human Health and Environmental Health. The stock currently has a dividend yield of 0.6%. PKI has a PE ratio of 35. Currently there are 11 analysts that rate PerkinElmer a buy, no analysts rate it a sell, and 4 rate it a hold.
The average volume for PerkinElmer has been 705,900 shares per day over the past 30 days. PerkinElmer has a market cap of $5.7 billion and is part of the health care sector and health services industry. The stock has a beta of 0.09 and a short float of 3.3% with 3.53 days to cover. Shares are up 17.6% year-to-date as of the close of trading on Thursday.
rates PerkinElmer as a
. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, expanding profit margins and growth in earnings per share. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. 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.
- The current debt-to-equity ratio, 0.49, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.06, which illustrates the ability to avoid short-term cash problems.
- The gross profit margin for PERKINELMER INC is rather high; currently it is at 51.00%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.65% trails the industry average.
- PERKINELMER INC has improved earnings per share by 20.0% 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, PERKINELMER INC reported lower earnings of $1.42 versus $1.54 in the prior year. This year, the market expects an improvement in earnings ($2.58 versus $1.42).
- You can view the full PerkinElmer Ratings Report.