Trade-Ideas: Bristol-Myers Squibb Company (BMY) 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 Bristol-Myers Squibb Company ( BMY) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Bristol-Myers Squibb Company as such a stock due to the following factors:

  • BMY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $237.0 million.
  • BMY has traded 3.4 million shares today.
  • BMY is trading at 1.59 times the normal volume for the stock at this time of day.
  • BMY crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on BMY:

Bristol-Myers Squibb Company discovers, develops, licenses, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. The stock currently has a dividend yield of 2.9%. BMY has a PE ratio of 31.2. Currently there are 9 analysts that rate Bristol-Myers Squibb Company a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for Bristol-Myers Squibb Company has been 6.5 million shares per day over the past 30 days. Bristol-Myers Squibb has a market cap of $83.3 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.40 and a short float of 1.5% with 6.97 days to cover. Shares are down 6% year-to-date as of the close of trading on Monday.

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 Bristol-Myers Squibb Company as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, notable return on equity, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.50, 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 1.15, which illustrates the ability to avoid short-term cash problems.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Pharmaceuticals industry and the overall market on the basis of return on equity, BRISTOL-MYERS SQUIBB CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • BRISTOL-MYERS SQUIBB CO's earnings per share declined by 37.5% in the most recent quarter compared to 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, BRISTOL-MYERS SQUIBB CO increased its bottom line by earning $1.55 versus $1.15 in the prior year. This year, the market expects an improvement in earnings ($1.80 versus $1.55).

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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