New Lifetime High Today: Covidien (COV)

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

  • COV has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $145.1 million.
  • COV has traded 50,927 shares today.
  • COV is trading at a new lifetime high.

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More details on COV:

Covidien plc develops, manufactures, and sells healthcare products for use in clinical and home settings worldwide. The stock currently has a dividend yield of 1.8%. COV has a PE ratio of 21.5. Currently there are 15 analysts that rate Covidien a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Covidien has been 2.0 million shares per day over the past 30 days. Covidien has a market cap of $31.5 billion and is part of the health care sector and health services industry. The stock has a beta of 1.12 and a short float of 1.3% with 3.05 days to cover. Shares are up 3.5% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Covidien as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, reasonable valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • COV's revenue growth has slightly outpaced the industry average of 3.8%. Since the same quarter one year prior, revenues slightly increased by 2.8%. 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. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, COVIDIEN PLC's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 84.16% to $221.00 million when compared to the same quarter last year. In addition, COVIDIEN PLC has also vastly surpassed the industry average cash flow growth rate of 2.17%.
  • Despite currently having a low debt-to-equity ratio of 0.53, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that COV's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.61 is high and demonstrates strong liquidity.

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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