Hospira (HSP) Is Today's Water-Logged And Getting Wetter 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 Hospira ( HSP) 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 Hospira as such a stock due to the following factors:

  • HSP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $48.2 million.
  • HSP has traded 503,742 shares today.
  • HSP traded in a range 215.8% of the normal price range with a price range of $1.74.
  • HSP traded below its daily resistance level (quality: 35 days, meaning that the stock is crossing a resistance level set by the last 35 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 HSP:

Hospira, Inc. provides injectable pharmaceutical drugs and infusion technologies to develop, manufacture, distribute, and market products worldwide. The company operates through Americas, EMEA, and APAC segments. HSP has a PE ratio of 52.2. Currently there is 1 analyst that rates Hospira a buy, 1 analyst rates it a sell, and 9 rate it a hold.

The average volume for Hospira has been 1.1 million shares per day over the past 30 days. Hospira has a market cap of $9.1 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.69 and a short float of 6.3% with 7.03 days to cover. Shares are up 31.4% year-to-date as of the close of trading on Tuesday.

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 Hospira as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, compelling growth in net income and good cash flow from operations. 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:
  • The revenue growth came in higher than the industry average of 4.7%. 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.
  • The current debt-to-equity ratio, 0.54, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.33, which illustrates the ability to avoid short-term cash problems.
  • Powered by its strong earnings growth of 110.00% and other important driving factors, this stock has surged by 38.81% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, HSP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Pharmaceuticals industry. The net income increased by 115.5% when compared to the same quarter one year prior, rising from $32.90 million to $70.90 million.
  • Net operating cash flow has significantly increased by 427.51% to $157.20 million when compared to the same quarter last year. In addition, HOSPIRA INC has also vastly surpassed the industry average cash flow growth rate of -1.32%.

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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