New Lifetime High Reached By Novartis (NVS)

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

  • NVS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $186.4 million.
  • NVS has traded 185,009 shares today.
  • NVS is trading at a new lifetime high.

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More details on NVS:

Its Pharmaceuticals division offers patented prescription medicines in various therapeutic areas, including oncology; primary care and established medicines; specialty care, such as ophthalmology, neuroscience, integrated hospital care, and critical care; and cardiovascular and metabolism. The stock currently has a dividend yield of 2.2%. NVS has a PE ratio of 21.9. Currently there are 4 analysts that rate Novartis a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Novartis has been 1.4 million shares per day over the past 30 days. Novartis has a market cap of $196.2 billion and is part of the health care sector and drugs industry. Shares are up 1.9% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Novartis as a buy. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, revenue growth, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures 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:
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 3.8%. Since the same quarter one year prior, revenues slightly increased by 1.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • NVS's debt-to-equity ratio is very low at 0.24 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.81 is somewhat weak and could be cause for future problems.
  • The gross profit margin for NOVARTIS AG is rather high; currently it is at 64.82%. Regardless of NVS'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 13.45% trails the industry average.

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