Trade-Ideas: Myriad Genetics (MYGN) Is Today's

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 Myriad Genetics ( MYGN) 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 Myriad Genetics as such a stock due to the following factors:

  • MYGN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $50.9 million.
  • MYGN has traded 1.5 million shares today.
  • MYGN traded in a range 234.5% of the normal price range with a price range of $1.82.
  • MYGN traded below its daily resistance level (quality: 5 days, meaning that the stock is crossing a resistance level set by the last 5 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 MYGN:

Myriad Genetics, Inc., a molecular diagnostic company, focuses on the development and marketing of predictive medicine, personalized medicine, and prognostic medicine tests primarily in the United States. MYGN has a PE ratio of 15.7. Currently there are 4 analysts that rate Myriad Genetics a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for Myriad Genetics has been 2.2 million shares per day over the past 30 days. Myriad has a market cap of $2.2 billion and is part of the services sector and diversified services industry. The stock has a beta of 1.07 and a short float of 18.6% with 6.99 days to cover. Shares are up 5.8% year to date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Myriad Genetics as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 9.4%. Since the same quarter one year prior, revenues rose by 30.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • MYGN has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 7.29, which clearly demonstrates the ability to cover short-term cash needs.
  • MYRIAD GENETICS INC reported significant earnings per share improvement 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, MYRIAD GENETICS INC increased its bottom line by earning $1.77 versus $1.30 in the prior year. This year, the market expects an improvement in earnings ($1.91 versus $1.77).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Biotechnology industry. The net income increased by 51.2% when compared to the same quarter one year prior, rising from $29.14 million to $44.07 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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