Trade-Ideas: Cardinal Health (CAH) Is Today's Post-Market Leader 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 Cardinal Health ( CAH) as a post-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified Cardinal Health as such a stock due to the following factors:

  • CAH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $127.5 million.
  • CAH is up 2.8% today from today's close.

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More details on CAH:

Cardinal Health, Inc., a healthcare services company, provides pharmaceutical and medical products and services in the United States and internationally. The company operates in two segments, Pharmaceutical and Medical. The stock currently has a dividend yield of 1.7%. CAH has a PE ratio of 66.3. Currently there are 12 analysts that rate Cardinal Health a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Cardinal Health has been 2.3 million shares per day over the past 30 days. Cardinal Health has a market cap of $24.8 billion and is part of the services sector and wholesale industry. The stock has a beta of 0.52 and a short float of 1.8% with 3.15 days to cover. Shares are up 8.8% year-to-date as of the close of trading on Monday.

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 Cardinal Health as a buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • Net operating cash flow has significantly increased by 128.46% to $37.00 million when compared to the same quarter last year. In addition, CARDINAL HEALTH INC has also vastly surpassed the industry average cash flow growth rate of -26.40%.
  • Compared to its closing price of one year ago, CAH's share price has jumped by 54.73%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • The current debt-to-equity ratio, 0.60, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that CAH's debt-to-equity ratio is low, the quick ratio, which is currently 0.57, displays a potential problem in covering short-term cash needs.
  • CARDINAL HEALTH INC's earnings per share declined by 10.2% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, CARDINAL HEALTH INC reported lower earnings of $0.95 versus $3.07 in the prior year. This year, the market expects an improvement in earnings ($3.84 versus $0.95).
  • CAH, with its decline in revenue, underperformed when compared the industry average of 10.4%. Since the same quarter one year prior, revenues fell by 11.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

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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