Don't Miss Today's Strong And Under The Radar Stock: Molina Healthcare (MOH)

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 Molina Healthcare ( MOH) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Molina Healthcare as such a stock due to the following factors:

  • MOH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $43.5 million.
  • MOH is making at least a new 3-day high.
  • MOH has a PE ratio of 196.3.
  • MOH is mentioned 1.42 times per day on StockTwits.
  • MOH has not yet been mentioned on StockTwits today.
  • MOH is currently in the upper 20% of its 1-year range.
  • MOH is in the upper 35% of its 20-day range.
  • MOH is in the upper 45% of its 5-day range.
  • MOH is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on MOH:

Molina Healthcare, Inc. provides Medicaid-related solutions to meet the health care needs of low-income families and individuals; and to assist state agencies in their administration of the Medicaid program. The company operates through two segments, Health Plans and Molina Medicaid Solutions. MOH has a PE ratio of 196.3. Currently there are 4 analysts that rate Molina Healthcare a buy, no analysts rate it a sell, and 9 rate it a hold.

The average volume for Molina Healthcare has been 651,300 shares per day over the past 30 days. Molina Healthcare has a market cap of $2.0 billion and is part of the health care sector and health services industry. The stock has a beta of 2.06 and a short float of 20.6% with 6.79 days to cover. Shares are up 26.3% 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 Molina Healthcare 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 good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 20.8%. Since the same quarter one year prior, revenues rose by 44.0%. 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.
  • The debt-to-equity ratio is somewhat low, currently at 0.88, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.38, which illustrates the ability to avoid short-term cash problems.
  • MOLINA HEALTHCARE 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, MOLINA HEALTHCARE INC increased its bottom line by earning $0.96 versus $0.25 in the prior year. This year, the market expects an improvement in earnings ($1.90 versus $0.96).
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Health Care Providers & Services industry and the overall market, MOLINA HEALTHCARE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for MOLINA HEALTHCARE INC is currently extremely low, coming in at 10.79%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.33% trails that of 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.

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