Trade-Ideas LLC identified

Mednax

(

MD

) 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 Mednax as such a stock due to the following factors:

  • MD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $83.2 million.
  • MD has traded 811,789 shares today.
  • MD traded in a range 236.3% of the normal price range with a price range of $5.36.
  • MD 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 MD:

MEDNAX, Inc., together with its subsidiaries, provides neonatal, anesthesia, maternal-fetal, and other pediatric subspecialties physician services in the United States and Puerto Rico. MD has a PE ratio of 18. Currently there are 11 analysts that rate Mednax a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Mednax has been 922,500 shares per day over the past 30 days. Mednax has a market cap of $6.1 billion and is part of the health care sector and health services industry. The stock has a beta of 0.41 and a short float of 8% with 5.87 days to cover. Shares are down 7.9% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Mednax as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income and expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • MD's revenue growth has slightly outpaced the industry average of 9.4%. Since the same quarter one year prior, revenues rose by 14.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • MEDNAX INC has improved earnings per share by 11.2% in the most recent quarter compared to the same quarter a year ago. 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, MEDNAX INC increased its bottom line by earning $3.58 versus $3.17 in the prior year. This year, the market expects an improvement in earnings ($4.28 versus $3.58).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Health Care Providers & Services industry average. The net income increased by 4.9% when compared to the same quarter one year prior, going from $88.40 million to $92.70 million.
  • The gross profit margin for MEDNAX INC is currently lower than what is desirable, coming in at 34.31%. Regardless of MD's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, MD's net profit margin of 12.49% significantly outperformed against the industry.
  • MD is off 6.73% from its price level of one year ago, reflecting the general market trend and ignoring their higher earnings per share compared to the year-earlier quarter. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.

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