Trade-Ideas: Endo Health Solutions (ENDP) 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 Endo Health Solutions ( ENDP) 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 Endo Health Solutions as such a stock due to the following factors:

  • ENDP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $76.9 million.
  • ENDP has traded 126,103 shares today.
  • ENDP traded in a range 358.5% of the normal price range with a price range of $3.08.
  • ENDP traded below 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 '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 ENDP:

Endo Health Solutions Inc. provides specialty healthcare solutions in the United States and internationally. Currently there are 8 analysts that rate Endo Health Solutions a buy, 7 analysts rate it a sell, and 4 rate it a hold.

The average volume for Endo Health Solutions has been 1.6 million shares per day over the past 30 days. Endo Health has a market cap of $5.2 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.35 and a short float of 15.5% with 8.59 days to cover. Shares are up 73.1% year to date as of the close of trading on Thursday.

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

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Endo Health Solutions as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, growth in earnings per share and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Pharmaceuticals industry. The net income increased by 269.8% when compared to the same quarter one year prior, rising from $9.47 million to $35.00 million.
  • Powered by its strong earnings growth of 275.00% and other important driving factors, this stock has surged by 43.55% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ENDP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • ENDO HEALTH SOLUTIONS INC reported significant earnings per share improvement 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, ENDO HEALTH SOLUTIONS INC swung to a loss, reporting -$6.57 versus $1.54 in the prior year. This year, the market expects an improvement in earnings ($4.54 versus -$6.57).
  • The gross profit margin for ENDO HEALTH SOLUTIONS INC is rather high; currently it is at 68.87%. Regardless of ENDP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ENDP's net profit margin of 4.56% is significantly lower than the industry average.
  • ENDP, with its decline in revenue, slightly underperformed the industry average of 3.9%. Since the same quarter one year prior, revenues slightly dropped by 2.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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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