New Lifetime High Reached: Covance (CVD)

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

  • CVD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $65.1 million.
  • CVD has traded 9,023 shares today.
  • CVD is trading at a new lifetime high.

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More details on CVD:

Covance Inc., a drug development services company, provides various early-stage and late-stage product development services primarily to the pharmaceutical, biotechnology, and medical device industries primarily in the United States and Europe. CVD has a PE ratio of 31.6. Currently there are 7 analysts that rate Covance a buy, 1 analyst rates it a sell, and 6 rate it a hold.

The average volume for Covance has been 380,100 shares per day over the past 30 days. Covance has a market cap of $5.2 billion and is part of the health care sector and health services industry. The stock has a beta of 1.02 and a short float of 5.6% with 4.20 days to cover. Shares are up 7% 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 Covance as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Life Sciences Tools & Services industry average. The net income increased by 16.9% when compared to the same quarter one year prior, going from $37.82 million to $44.20 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.2%. Since the same quarter one year prior, revenues slightly increased by 8.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CVD's debt-to-equity ratio is very low at 0.18 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.41, which illustrates the ability to avoid short-term cash problems.
  • 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 43.71% over the past year, a rise that has exceeded that of the S&P 500 Index. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.

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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