Trade-Ideas: Amgen (AMGN) 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 Amgen ( AMGN) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Amgen as such a stock due to the following factors:

  • AMGN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $456.6 million.
  • AMGN has traded 2.6 million shares today.
  • AMGN traded in a range 241.8% of the normal price range with a price range of $6.43.
  • AMGN traded above its daily resistance level (quality: 527 days, meaning that the stock is crossing a resistance level set by the last 527 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on AMGN:

Amgen Inc., a biotechnology company, discovers, develops, manufactures, and delivers human therapeutics in the areas of oncology, hematology, inflammation, bone health, nephrology, cardiovascular, and general medicine worldwide. The stock currently has a dividend yield of 1.9%. AMGN has a PE ratio of 19.3. Currently there are 7 analysts that rate Amgen a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Amgen has been 2.9 million shares per day over the past 30 days. Amgen has a market cap of $96.0 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.28 and a short float of 1.3% with 2.74 days to cover. Shares are up 11.6% year-to-date as of the close of trading on Wednesday.

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 Amgen 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, revenue growth, reasonable valuation levels and good cash flow from operations. 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:
  • 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. 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.
  • AMGEN INC has improved earnings per share by 21.8% 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, AMGEN INC increased its bottom line by earning $6.65 versus $5.51 in the prior year. This year, the market expects an improvement in earnings ($8.35 versus $6.65).
  • The revenue growth significantly trails the industry average of 41.0%. Since the same quarter one year prior, revenues rose by 10.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has increased to $2,227.00 million or 39.18% when compared to the same quarter last year. Despite an increase in cash flow of 39.18%, AMGEN INC is still growing at a significantly lower rate than the industry average of 96.45%.

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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