Regeneron Pharmaceuticals (REGN) Is Today's Storm The Castle 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 Regeneron Pharmaceuticals ( REGN) 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 Regeneron Pharmaceuticals as such a stock due to the following factors:

  • REGN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $377.2 million.
  • REGN has traded 618,971 shares today.
  • REGN is trading at 4.03 times the normal volume for the stock at this time of day.
  • REGN 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.

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More details on REGN:

Regeneron Pharmaceuticals, Inc., a biopharmaceutical company, discovers, invents, develops, manufactures, and commercializes medicines for the treatment of serious medical conditions in the United States and internationally. REGN has a PE ratio of 79.5. Currently there are 6 analysts that rate Regeneron Pharmaceuticals a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Regeneron Pharmaceuticals has been 878,300 shares per day over the past 30 days. Regeneron has a market cap of $27.4 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.86 and a short float of 6.1% with 3.25 days to cover. Shares are up 2.6% year-to-date as of the close of trading on Monday.

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 Regeneron Pharmaceuticals as a hold. 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 and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 25.6%. Since the same quarter one year prior, revenues rose by 42.3%. 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.
  • REGN's debt-to-equity ratio is very low at 0.24 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 5.56, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for REGENERON PHARMACEUTICALS is currently lower than what is desirable, coming in at 31.56%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 10.45% significantly trails the industry average.
  • Net operating cash flow has decreased to $53.53 million or 37.93% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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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