New Lifetime High For Novartis (NVS)

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

  • NVS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $145.1 million.
  • NVS has traded 620,201 shares today.
  • NVS is trading at a new lifetime high.

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More details on NVS:

Novartis AG engages in the research, development, manufacture, and marketing of a range of healthcare products worldwide. The stock currently has a dividend yield of 2.7%. NVS has a PE ratio of 19.6. Currently there are 6 analysts that rate Novartis a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Novartis has been 1.3 million shares per day over the past 30 days. Novartis has a market cap of $186.9 billion and is part of the health care sector and drugs industry. Shares are up 20.6% year to date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Novartis as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 2.2%. Since the same quarter one year prior, revenues slightly increased by 1.3%. 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.
  • NVS's debt-to-equity ratio is very low at 0.27 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that NVS's debt-to-equity ratio is low, the quick ratio, which is currently 0.66, displays a potential problem in covering short-term cash needs.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • NOVARTIS AG's earnings per share declined by 7.3% 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, NOVARTIS AG increased its bottom line by earning $3.84 versus $3.80 in the prior year. This year, the market expects an improvement in earnings ($5.16 versus $3.84).

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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