Today's Momo Momentum Stock Is Teva Pharmaceutical Industries (TEVA)

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 Teva Pharmaceutical Industries ( TEVA) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Teva Pharmaceutical Industries as such a stock due to the following factors:

  • TEVA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $169.5 million.
  • TEVA has a PE ratio of 17.2.
  • TEVA is currently in the upper 30% of its 1-year range.
  • TEVA is in the upper 25% of its 20-day range.
  • TEVA is in the upper 35% of its 5-day range.
  • TEVA is currently trading above yesterday's high.
  • TEVA has experienced a gap between today's open and yesterday's close of 0.2%.

'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.

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More details on TEVA:

Teva Pharmaceutical Industries Limited develops, manufactures, markets, and distributes pharmaceutical products worldwide. The stock currently has a dividend yield of 2.6%. TEVA has a PE ratio of 17.2. Currently there are 7 analysts that rate Teva Pharmaceutical Industries a buy, 1 analyst rates it a sell, and 14 rate it a hold.

The average volume for Teva Pharmaceutical Industries has been 3.4 million shares per day over the past 30 days. Teva has a market cap of $32.7 billion and is part of the health care sector and drugs industry. Shares are up 3.7% year to date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Teva Pharmaceutical Industries as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • 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. Despite the fact that TEVA's debt-to-equity ratio is low, the quick ratio, which is currently 0.51, displays a potential problem in covering short-term cash needs.
  • The gross profit margin for TEVA PHARMACEUTICALS is rather high; currently it is at 60.93%. Regardless of TEVA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TEVA's net profit margin of -9.17% significantly underperformed when compared to the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Pharmaceuticals industry. The net income has significantly decreased by 152.4% when compared to the same quarter one year ago, falling from $863.00 million to -$452.00 million.
  • In its most recent trading session, TEVA has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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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