Today's Momo Momentum Stock To Watch: Celgene Corporation (CELG)

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 Celgene Corporation ( CELG) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Celgene Corporation as such a stock due to the following factors:

  • CELG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $460.0 million.
  • CELG has a PE ratio of 47.5.
  • CELG is currently in the upper 30% of its 1-year range.
  • CELG is in the upper 25% of its 20-day range.
  • CELG is in the upper 35% of its 5-day range.
  • CELG is currently trading above yesterday's high.
  • CELG has experienced a gap between today's open and yesterday's close of 0.5%.

'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 CELG:

Celgene Corporation, a biopharmaceutical company, discovers, develops, and commercializes therapies to treat cancer and immune-inflammatory related diseases in the United States and internationally. CELG has a PE ratio of 47.5. Currently there are 24 analysts that rate Celgene Corporation a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Celgene Corporation has been 3.0 million shares per day over the past 30 days. Celgene has a market cap of $65.0 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.05 and a short float of 1.1% with 1.67 days to cover. Shares are down 4.3% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Celgene Corporation as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, reasonable valuation levels, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • CELG's revenue growth has slightly outpaced the industry average of 15.7%. Since the same quarter one year prior, revenues rose by 21.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Biotechnology industry and the overall market, CELGENE CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • The gross profit margin for CELGENE CORP is currently very high, coming in at 96.51%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 12.21% trails the industry average.
  • Net operating cash flow has increased to $550.70 million or 12.29% when compared to the same quarter last year. Despite an increase in cash flow, CELGENE CORP's cash flow growth rate is still lower than the industry average growth rate of 42.25%.

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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