Trade-Ideas: Medtronic (MDT) Is Today's Pre-Market Laggard 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 Medtronic ( MDT) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Medtronic as such a stock due to the following factors:

  • MDT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $442.2 million.
  • MDT traded 12,985 shares today in the pre-market hours as of 7:43 AM.
  • MDT is down 3.6% today from Friday's close.

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More details on MDT:

Medtronic, Inc. manufactures and sells device-based medical therapies worldwide. It operates through three segments: Cardiac and Vascular Group, Restorative Therapies Group, and Diabetes Group. The stock currently has a dividend yield of 1.8%. MDT has a PE ratio of 22.5. Currently there are 11 analysts that rate Medtronic a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Medtronic has been 7.4 million shares per day over the past 30 days. Medtronic has a market cap of $65.2 billion and is part of the health care sector and health services industry. The stock has a beta of 0.87 and a short float of 1.2% with 9.30 days to cover. Shares are up 15.4% 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 Medtronic as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures, solid stock price performance 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:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.8%. Since the same quarter one year prior, revenues slightly increased by 4.7%. 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.
  • MDT's debt-to-equity ratio of 0.67 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.25 is very high and demonstrates very strong liquidity.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The gross profit margin for MEDTRONIC INC is currently very high, coming in at 77.14%. Regardless of MDT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MDT's net profit margin of 20.38% compares favorably to 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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