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 Perrigo Company ( PRGO) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Perrigo Company as such a stock due to the following factors:
- PRGO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $235.4 million.
- PRGO has a PE ratio of 31.6.
- PRGO is currently in the upper 30% of its 1-year range.
- PRGO is in the upper 25% of its 20-day range.
- PRGO is in the upper 35% of its 5-day range.
- PRGO is currently trading above yesterday's high.
- PRGO 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. EXCLUSIVE OFFER: Get the inside scoop on opportunities in PRGO with the Ticky from Trade-Ideas. See the FREE profile for PRGO NOW at Trade-Ideas More details on PRGO: Perrigo Company, through its subsidiaries, develops, manufactures, and distributes over-the-counter (OTC) and generic prescription (Rx) pharmaceuticals, nutritional products, and active pharmaceutical ingredients (API). The stock currently has a dividend yield of 0.2%. PRGO has a PE ratio of 31.6. Currently there are 10 analysts that rate Perrigo Company a buy, no analysts rate it a sell, and 4 rate it a hold. The average volume for Perrigo Company has been 1.1 million shares per day over the past 30 days. Perrigo has a market cap of $14.1 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.14 and a short float of 12.6% with 7.40 days to cover. Shares are up 43.8% year to date as of the close of trading on Tuesday. 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 Perrigo Company as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 2.6%. Since the same quarter one year prior, revenues rose by 21.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- PERRIGO CO has improved earnings per share by 5.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, PERRIGO CO increased its bottom line by earning $4.67 versus $4.18 in the prior year. This year, the market expects an improvement in earnings ($6.61 versus $4.67).
- Net operating cash flow has significantly increased by 120.04% to $98.70 million when compared to the same quarter last year. In addition, PERRIGO CO has also vastly surpassed the industry average cash flow growth rate of 5.91%.
- 43.28% is the gross profit margin for PERRIGO CO which we consider to be strong. 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 11.93% trails the industry average.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 32.41% over the past year, a rise that has exceeded that of the S&P 500 Index. 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.
- You can view the full Perrigo Company 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.