Trade-Ideas: AmerisourceBergen (ABC) Is Today's New Lifetime High Stock

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 AmerisourceBergen ( ABC) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified AmerisourceBergen as such a stock due to the following factors:

  • ABC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $83.1 million.
  • ABC has traded 678,146 shares today.
  • ABC is trading at a new lifetime high.

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More details on ABC:

AmerisourceBergen Corporation, a pharmaceutical services company, provides drug distribution and related healthcare services and solutions to pharmacy, physician, and manufacturer customers primarily in the United States and Canada. The stock currently has a dividend yield of 1.4%. ABC has a PE ratio of 24.9. Currently there are 6 analysts that rate AmerisourceBergen a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for AmerisourceBergen has been 1.6 million shares per day over the past 30 days. AmerisourceBergen has a market cap of $14.1 billion and is part of the services sector and wholesale industry. The stock has a beta of 0.79 and a short float of 2.6% with 4.50 days to cover. Shares are up 41.1% year to date as of the close of trading on Friday.

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 AmerisourceBergen as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • ABC's revenue growth has slightly outpaced the industry average of 3.9%. Since the same quarter one year prior, revenues rose by 13.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • 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 Providers & Services industry and the overall market, AMERISOURCEBERGEN CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The current debt-to-equity ratio, 0.58, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.49 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • Compared to its closing price of one year ago, ABC's share price has jumped by 58.49%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • AMERISOURCEBERGEN CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, AMERISOURCEBERGEN CORP increased its bottom line by earning $2.84 versus $2.54 in the prior year. This year, the market expects an improvement in earnings ($3.08 versus $2.84).

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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