Teva Pharmaceutical Industries (TEVA) Highlighted As Momo Momentum Stock

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 $333.6 million.
  • TEVA has a PE ratio of 19.7.
  • 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 0.7%.

'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 2.5%. TEVA has a PE ratio of 19.7. Currently there are 5 analysts that rate Teva Pharmaceutical Industries a buy, 3 analysts rate it a sell, and 10 rate it a hold.

The average volume for Teva Pharmaceutical Industries has been 6.6 million shares per day over the past 30 days. Teva has a market cap of $37.4 billion and is part of the health care sector and drugs industry. Shares are up 10.4% 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 revenue growth, increase in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • TEVA's revenue growth has slightly outpaced the industry average of 1.1%. Since the same quarter one year prior, revenues slightly increased by 1.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Pharmaceuticals industry. The net income increased by 1000.0% when compared to the same quarter one year prior, rising from -$79.00 million to $711.00 million.
  • The current debt-to-equity ratio, 0.56, 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 0.52, displays a potential problem in covering short-term cash needs.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Pharmaceuticals industry and the overall market, TEVA PHARMACEUTICALS's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Net operating cash flow has significantly decreased to $444.00 million or 57.63% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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