Watch For Today's Momo Momentum Stock: Biogen Idec (BIIB)

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 Biogen Idec ( BIIB) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Biogen Idec as such a stock due to the following factors:

  • BIIB has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $275.5 million.
  • BIIB has a PE ratio of 38.2.
  • BIIB is currently in the upper 30% of its 1-year range.
  • BIIB is in the upper 25% of its 20-day range.
  • BIIB is in the upper 35% of its 5-day range.
  • BIIB is currently trading above yesterday's high.
  • BIIB has experienced a gap between today's open and yesterday's close of 0.7%.

'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.

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More details on BIIB:

Biogen Idec Inc. discovers, develops, manufactures, and markets therapies for the treatment of multiple sclerosis (MS), neurodegenerative diseases, hemophilia, and autoimmune disorders in the United States and internationally. BIIB has a PE ratio of 38.2. Currently there are 12 analysts that rate Biogen Idec a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Biogen Idec has been 1.1 million shares per day over the past 30 days. Biogen Idec has a market cap of $81.1 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.24 and a short float of 1.5% with 4.16 days to cover. Shares are up 22.1% year-to-date as of the close of trading on Thursday.

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 Biogen Idec as a buy. 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, notable return on equity, reasonable valuation levels and solid stock price performance. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 43.4%. Since the same quarter one year prior, revenues rose by 40.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • BIIB's debt-to-equity ratio is very low at 0.06 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.49, which illustrates the ability to avoid short-term cash problems.
  • 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 Biotechnology industry and the overall market, BIOGEN IDEC INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Powered by its strong earnings growth of 46.11% and other important driving factors, this stock has surged by 62.71% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.

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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