Alexion Pharmaceuticals (ALXN) Is Today's Water-Logged And Getting Wetter 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 Alexion Pharmaceuticals ( ALXN) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Alexion Pharmaceuticals as such a stock due to the following factors:

  • ALXN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $247.0 million.
  • ALXN has traded 849,227 shares today.
  • ALXN traded in a range 227.8% of the normal price range with a price range of $13.31.
  • ALXN traded below its daily resistance level (quality: 41 days, meaning that the stock is crossing a resistance level set by the last 41 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on ALXN:

Alexion Pharmaceuticals, Inc., a biopharmaceutical company, develops and commercializes life-transforming therapeutic products. ALXN has a PE ratio of 142.5. Currently there are 16 analysts that rate Alexion Pharmaceuticals a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Alexion Pharmaceuticals has been 1.5 million shares per day over the past 30 days. Alexion has a market cap of $34.8 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.50 and a short float of 1.9% with 2.20 days to cover. Shares are up 32.4% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Alexion Pharmaceuticals as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 14.9%. Since the same quarter one year prior, revenues rose by 37.9%. 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.
  • ALXN's debt-to-equity ratio is very low at 0.06 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.36, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has significantly increased by 99.01% to $208.88 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 62.62%.
  • Compared to its closing price of one year ago, ALXN's share price has jumped by 91.42%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • ALEXION PHARMACEUTICALS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, ALEXION PHARMACEUTICALS INC reported lower earnings of $1.26 versus $1.27 in the prior year. This year, the market expects an improvement in earnings ($4.43 versus $1.26).

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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