CareFusion (CFN) Hits New Lifetime High

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

  • CFN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $51.9 million.
  • CFN has traded 1.8 million shares today.
  • CFN is trading at a new lifetime high.

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More details on CFN:

CareFusion Corporation, a medical technology company, provides various healthcare products and services. It offers product lines in the areas of medication management, infection prevention, operating room effectiveness, respiratory care, and surveillance and analytics. CFN has a PE ratio of 23.1. Currently there are 5 analysts that rate CareFusion a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for CareFusion has been 1.4 million shares per day over the past 30 days. CareFusion has a market cap of $8.4 billion and is part of the health care sector and health services industry. The stock has a beta of 1.06 and a short float of 0.9% with 1.40 days to cover. Shares are up 0.5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates CareFusion as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, CFN's share price has jumped by 33.91%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CFN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • CFN'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. Along with this, the company maintains a quick ratio of 2.58, which clearly demonstrates the ability to cover short-term cash needs.
  • CAREFUSION CORP's earnings per share declined by 7.7% 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, CAREFUSION CORP increased its bottom line by earning $1.73 versus $1.60 in the prior year. This year, the market expects an improvement in earnings ($2.35 versus $1.73).
  • The gross profit margin for CAREFUSION CORP is rather high; currently it is at 56.51%. Regardless of CFN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 9.39% trails the industry average.

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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