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 ResMed as such a stock due to the following factors:
- RMD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $50.2 million.
- RMD has traded 443,078 shares today.
- RMD traded in a range 206.8% of the normal price range with a price range of $1.94.
- RMD traded above its daily resistance level (quality: 44 days, meaning that the stock is crossing a resistance level set by the last 44 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 RMD:
ResMed Inc. develops, manufactures, distributes, and markets medical equipment for the diagnosis, treatment, and management of respiratory disorders, with a focus on sleep-disordered breathing. The stock currently has a dividend yield of 2%. RMD has a PE ratio of 23. Currently there are 4 analysts that rate ResMed a buy, 1 analyst rates it a sell, and 5 rate it a hold.
The average volume for ResMed has been 997,900 shares per day over the past 30 days. ResMed has a market cap of $7.9 billion and is part of the health care sector and health services industry. The stock has a beta of 0.51 and a short float of 8.4% with 13.54 days to cover. Shares are up 0.1% year-to-date as of the close of trading on Thursday.
rates ResMed as a
. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity and reasonable valuation levels. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry average. The net income increased by 1.1% when compared to the same quarter one year prior, going from $89.97 million to $90.98 million.
- RMD's revenue growth trails the industry average of 26.3%. Since the same quarter one year prior, revenues slightly increased by 6.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- RMD's debt-to-equity ratio is very low at 0.30 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 4.76, which clearly demonstrates the ability to cover short-term cash needs.
- 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 Equipment & Supplies industry and the overall market, RESMED INC's return on equity exceeds that of both the industry average and the S&P 500.
- You can view the full ResMed Ratings Report.