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 Sanofi ( SNY) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Sanofi as such a stock due to the following factors:
- SNY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $75.5 million.
- SNY has traded 523,768 shares today.
- SNY is trading at 1.72 times the normal volume for the stock at this time of day.
- SNY crossed above its 200-day simple moving average.
'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success. EXCLUSIVE OFFER: Get the inside scoop on opportunities in SNY with the Ticky from Trade-Ideas. See the FREE profile for SNY NOW at Trade-Ideas More details on SNY: Sanofi researches, develops, manufactures, and markets healthcare products. The company operates in three segments: Pharmaceuticals, Human Vaccines, and Animal Health. The stock currently has a dividend yield of 2.6%. SNY has a PE ratio of 27.1. Currently there are 2 analysts that rate Sanofi a buy, no analysts rate it a sell, and 4 rate it a hold. The average volume for Sanofi has been 1.7 million shares per day over the past 30 days. Sanofi has a market cap of $133.7 billion and is part of the health care sector and drugs industry. Shares are down 6.3% year-to-date as of the close of trading on Thursday. 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 Sanofi as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity. Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Pharmaceuticals industry. The net income increased by 130.2% when compared to the same quarter one year prior, rising from $660.15 million to $1,519.99 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 1.5%. Since the same quarter one year prior, revenues slightly increased by 0.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- SNY's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
- The gross profit margin for SANOFI is rather high; currently it is at 58.08%. 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 12.27% trails the industry average.
- SANOFI reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SANOFI reported lower earnings of $1.93 versus $2.44 in the prior year. This year, the market expects an improvement in earnings ($3.50 versus $1.93).
- You can view the full Sanofi Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.