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 HCA Holdings ( HCA) 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 HCA Holdings as such a stock due to the following factors:
- HCA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $99.3 million.
- HCA has traded 1.8 million shares today.
- HCA traded in a range 200.6% of the normal price range with a price range of $1.87.
- HCA traded below its daily resistance level (quality: 20 days, meaning that the stock is crossing a resistance level set by the last 20 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 HCA with the Ticky from Trade-Ideas. See the FREE profile for HCA NOW at Trade-Ideas More details on HCA: HCA Holdings, Inc., through its subsidiaries, provides health care services in the United States. HCA has a PE ratio of 15.0. Currently there are 15 analysts that rate HCA Holdings a buy, no analysts rate it a sell, and 2 rate it a hold. The average volume for HCA Holdings has been 3.5 million shares per day over the past 30 days. HCA has a market cap of $21.0 billion and is part of the health care sector and health services industry. The stock has a beta of 1.85 and a short float of 1.1% with 1.38 days to cover. Shares are up 56.4% year-to-date as of the close of trading on Monday. 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 HCA Holdings as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share and poor profit margins. Highlights from the ratings report include:
- HCA HOLDINGS INC's earnings per share improvement from the most recent quarter was slightly positive. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, HCA HOLDINGS INC reported lower earnings of $3.49 versus $5.31 in the prior year. For the next year, the market is expecting a contraction of 5.3% in earnings ($3.31 versus $3.49).
- The gross profit margin for HCA HOLDINGS INC is rather low; currently it is at 19.75%. Regardless of HCA's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, HCA's net profit margin of 4.31% compares favorably to the industry average.
- The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Health Care Providers & Services industry average. The net income increased by 1.4% when compared to the same quarter one year prior, going from $360.00 million to $365.00 million.
- Net operating cash flow has increased to $900.00 million or 37.40% when compared to the same quarter last year. Despite an increase in cash flow of 37.40%, HCA HOLDINGS INC is still growing at a significantly lower rate than the industry average of 321.79%.
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.4%. Since the same quarter one year prior, revenues slightly increased by 4.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- You can view the full HCA Holdings 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.