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 AstraZeneca ( AZN) 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 AstraZeneca as such a stock due to the following factors:
- AZN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $46.6 million.
- AZN has traded 1.6 million shares today.
- AZN traded in a range 883.8% of the normal price range with a price range of $4.82.
- AZN traded below its daily resistance level (quality: 53 days, meaning that the stock is crossing a resistance level set by the last 53 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. EXCLUSIVE OFFER: Get the inside scoop on opportunities in AZN with the Ticky from Trade-Ideas. See the FREE profile for AZN NOW at Trade-Ideas More details on AZN: AstraZeneca PLC engages in the discovery, development, and commercialization of prescription medicines for cardiovascular, gastrointestinal, neuroscience, infection, oncology, and respiratory and inflammation diseases worldwide. The stock currently has a dividend yield of 5.4%. AZN has a PE ratio of 10.3. Currently there is 1 analyst that rates AstraZeneca a buy, 2 analysts rate it a sell, and 4 rate it a hold. The average volume for AstraZeneca has been 1.5 million shares per day over the past 30 days. AstraZeneca has a market cap of $64.6 billion and is part of the health care sector and drugs industry. Shares are up 9.1% 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 AstraZeneca as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, good cash flow from operations, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- The current debt-to-equity ratio, 0.45, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.14, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has increased to $1,606.00 million or 28.37% when compared to the same quarter last year. In addition, ASTRAZENECA PLC has also vastly surpassed the industry average cash flow growth rate of -24.88%.
- The gross profit margin for ASTRAZENECA PLC is currently very high, coming in at 95.45%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 12.83% trails the industry average.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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.
- You can view the full AstraZeneca Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.