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 Laboratory Corp of America Hldgs ( LH) 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 Laboratory Corp of America Hldgs as such a stock due to the following factors:
- LH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $83.2 million.
- LH has traded 59,309 shares today.
- LH traded in a range 300.8% of the normal price range with a price range of $4.93.
- LH traded below its daily resistance level (quality: 33 days, meaning that the stock is crossing a resistance level set by the last 33 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. EXCLUSIVE OFFER: Get the inside scoop on opportunities in LH with the Ticky from Trade-Ideas. See the FREE profile for LH NOW at Trade-Ideas More details on LH: Laboratory Corporation of America Holdings operates as an independent clinical laboratory company worldwide. LH has a PE ratio of 15.7. Currently there are 6 analysts that rate Laboratory Corp of America Hldgs a buy, 2 analysts rate it a sell, and 10 rate it a hold. The average volume for Laboratory Corp of America Hldgs has been 1.2 million shares per day over the past 30 days. Laboratory Corp of America Hldgs has a market cap of $8.5 billion and is part of the health care sector and health services industry. The stock has a beta of 0.77 and a short float of 9.9% with 8.65 days to cover. Shares are up 8.9% year-to-date as of the close of trading on Friday. 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 Laboratory Corp of America Hldgs as a buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, revenue growth, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated. Highlights from the ratings report include:
- LABORATORY CP OF AMER HLDGS has improved earnings per share by 13.5% 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, LABORATORY CP OF AMER HLDGS increased its bottom line by earning $6.24 versus $5.98 in the prior year. This year, the market expects an improvement in earnings ($6.64 versus $6.24).
- The net income growth from the same quarter one year ago has significantly exceeded that of the Health Care Providers & Services industry average, but is less than that of the S&P 500. The net income increased by 5.1% when compared to the same quarter one year prior, going from $120.20 million to $126.30 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 10.4%. Since the same quarter one year prior, revenues slightly increased by 2.3%. Growth in the company's revenue appears to have helped boost the 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. In comparison to the other companies in the Health Care Providers & Services industry and the overall market, LABORATORY CP OF AMER HLDGS's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. 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.
- You can view the full Laboratory Corp of America Hldgs 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.