Alere (ALR) Is Today's Dead Cat Bounce 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 Alere ( ALR) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Alere as such a stock due to the following factors:

  • ALR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $31.7 million.
  • ALR has traded 741,515 shares today.
  • ALR is up 3.1% today.
  • ALR was down 13% yesterday.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in ALR with the Ticky from Trade-Ideas. See the FREE profile for ALR NOW at Trade-Ideas

More details on ALR:

Alere Inc. provides diagnostics and services for cardiology, infectious disease, toxicology, and diabetes in the United States and internationally. The company operates in three segments: Professional Diagnostics, Health Information Solutions, and Consumer Diagnostics. Currently there are 3 analysts that rate Alere a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Alere has been 513,200 shares per day over the past 30 days. Alere has a market cap of $3.3 billion and is part of the health care sector and health services industry. The stock has a beta of 2.59 and a short float of 6.3% with 4.74 days to cover. Shares are down 4% 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 Alere as a buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Net operating cash flow has increased to $105.91 million or 49.03% when compared to the same quarter last year. In addition, ALERE INC has also vastly surpassed the industry average cash flow growth rate of -30.55%.
  • 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, despite the company's weak earnings results. 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.
  • ALERE INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ALERE INC continued to lose money by earning -$1.13 versus -$1.23 in the prior year. This year, the market expects an improvement in earnings ($2.54 versus -$1.13).
  • ALR, with its decline in revenue, underperformed when compared the industry average of 8.8%. Since the same quarter one year prior, revenues slightly dropped by 3.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for ALERE INC is rather high; currently it is at 62.82%. Regardless of ALR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ALR's net profit margin of -0.86% significantly underperformed when compared to the industry average.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

null

More from Markets

Trump Takes Aim at Auto Imports; Markets End Mixed -- ICYMI

Trump Takes Aim at Auto Imports; Markets End Mixed -- ICYMI

Video: What Oprah's Content Partnership With Apple Means for the Rest of Tech

Video: What Oprah's Content Partnership With Apple Means for the Rest of Tech

REPLAY: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

REPLAY: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

Flashback Friday: The Market Movers

Flashback Friday: The Market Movers

OPEC Deal Doesn't Boost Production Enough to Drive Down Crude, Gasoline Prices

OPEC Deal Doesn't Boost Production Enough to Drive Down Crude, Gasoline Prices