Trade-Ideas: Henry Schein (HSIC) Is Today's

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 Henry Schein ( HSIC) 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 Henry Schein as such a stock due to the following factors:

  • HSIC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $52.7 million.
  • HSIC has traded 131,452 shares today.
  • HSIC traded in a range 269.7% of the normal price range with a price range of $4.07.
  • HSIC traded below its daily resistance level (quality: 72 days, meaning that the stock is crossing a resistance level set by the last 72 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.

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More details on HSIC:

Henry Schein, Inc. distributes health care products and services worldwide. It operates in two segments, Health Care Distribution, and Technology and Value-Added Services. HSIC has a PE ratio of 22.9. Currently there are 5 analysts that rate Henry Schein a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for Henry Schein has been 408,300 shares per day over the past 30 days. Henry Schein has a market cap of $9.9 billion and is part of the services sector and wholesale industry. The stock has a beta of 1.01 and a short float of 3.6% with 7.47 days to cover. Shares are up 2.7% 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 Henry Schein as a buy. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, growth in earnings per share, increase in net income, revenue growth and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • SCHEIN (HENRY) INC has improved earnings per share by 14.6% 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, SCHEIN (HENRY) INC increased its bottom line by earning $4.92 versus $4.31 in the prior year. This year, the market expects an improvement in earnings ($5.37 versus $4.92).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Health Care Providers & Services industry average. The net income increased by 11.6% when compared to the same quarter one year prior, going from $91.48 million to $102.10 million.
  • HSIC's revenue growth trails the industry average of 21.2%. Since the same quarter one year prior, revenues slightly increased by 6.0%. 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. Compared to other companies in the Health Care Providers & Services industry and the overall market, SCHEIN (HENRY) INC's return on equity exceeds that of both the industry average and the S&P 500.

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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