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 Zimmer Holdings ( ZMH) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Zimmer Holdings as such a stock due to the following factors:

  • ZMH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $129.2 million.
  • ZMH traded 188,550 shares today in the pre-market hours as of 8:02 AM, representing 15.1% of its average daily volume.

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More details on ZMH:

Zimmer Holdings, Inc., through its subsidiaries, designs, develops, manufactures, and markets orthopedic reconstructive devices, spinal and trauma devices, biologics, dental implants, and related surgical products in the Americas, Europe, and the Asia Pacific. The stock currently has a dividend yield of 0.9%. ZMH has a PE ratio of 21.5. Currently there are 11 analysts that rate Zimmer Holdings a buy, no analysts rate it a sell, and 11 rate it a hold.

The average volume for Zimmer Holdings has been 1.2 million shares per day over the past 30 days. Zimmer has a market cap of $15.5 billion and is part of the health care sector and health services industry. The stock has a beta of 0.92 and a short float of 2.5% with 3.35 days to cover. Shares are down 1.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Zimmer Holdings as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • ZIMMER HOLDINGS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ZIMMER HOLDINGS INC increased its bottom line by earning $4.43 versus $4.29 in the prior year. This year, the market expects an improvement in earnings ($6.21 versus $4.43).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income increased by 54.4% when compared to the same quarter one year prior, rising from $152.80 million to $235.90 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.3%. Since the same quarter one year prior, revenues slightly increased by 5.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ZMH's debt-to-equity ratio is very low at 0.27 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 2.66, which clearly demonstrates the ability to cover short-term cash needs.

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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