Stryker Corporation (SYK) Showing Signs Of Being Strong And Under The Radar

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

  • SYK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $88.4 million.
  • SYK is making at least a new 3-day high.
  • SYK has a PE ratio of 46.4.
  • SYK is mentioned 1.97 times per day on StockTwits.
  • SYK has not yet been mentioned on StockTwits today.
  • SYK is currently in the upper 20% of its 1-year range.
  • SYK is in the upper 35% of its 20-day range.
  • SYK is in the upper 45% of its 5-day range.
  • SYK 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 SYK:

Stryker Corporation, together with its subsidiaries, operates as a medical technology company. The company operates in three segments: Reconstructive, MedSurg, and Neurotechnology and Spine. The stock currently has a dividend yield of 1.5%. SYK has a PE ratio of 46.4. Currently there are 13 analysts that rate Stryker Corporation a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Stryker Corporation has been 1.3 million shares per day over the past 30 days. Stryker has a market cap of $31.5 billion and is part of the health care sector and health services industry. The stock has a beta of 0.85 and a short float of 1.4% with 3.94 days to cover. Shares are up 11.1% 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 Stryker Corporation 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, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.6%. Since the same quarter one year prior, revenues slightly increased by 6.8%. 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 current debt-to-equity ratio, 0.43, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, SYK has a quick ratio of 1.68, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has slightly increased to $366.00 million or 2.80% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -19.95%.
  • The gross profit margin for STRYKER CORP is rather high; currently it is at 68.18%. Regardless of SYK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.41% trails the industry average.
  • STRYKER CORP's earnings per share declined by 41.1% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, STRYKER CORP reported lower earnings of $2.63 versus $3.39 in the prior year. This year, the market expects an improvement in earnings ($4.77 versus $2.63).

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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