Trade-Ideas: Sanofi (SNY) Is Today's Post-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 Sanofi ( SNY) as a post-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Sanofi as such a stock due to the following factors:

  • SNY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $202.3 million.
  • SNY is down 3.1% today from today's close.

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More details on SNY:

Sanofi researches, develops, manufactures, and markets healthcare products. The company operates in three segments: Pharmaceuticals, Human Vaccines, and Animal Health. The stock currently has a dividend yield of 2.9%. SNY has a PE ratio of 24.6. Currently there is 1 analyst that rates Sanofi a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Sanofi has been 1.6 million shares per day over the past 30 days. Sanofi has a market cap of $120.7 billion and is part of the health care sector and drugs industry. Shares are down 13.8% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Sanofi as a buy. Among the primary strengths of the company is its expanding profit margins over time. 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 gross profit margin for SANOFI is rather high; currently it is at 61.62%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 13.74% trails the industry average.
  • SANOFI's earnings per share declined by 24.6% 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, SANOFI reported lower earnings of $1.90 versus $2.44 in the prior year. This year, the market expects an improvement in earnings ($3.27 versus $1.90).
  • SNY, with its decline in revenue, underperformed when compared the industry average of 9.8%. Since the same quarter one year prior, revenues fell by 23.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, SNY has underperformed the S&P 500 Index, declining 13.47% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it is one of the factors that makes this stock an attractive investment.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Pharmaceuticals industry. The net income has decreased by 24.4% when compared to the same quarter one year ago, dropping from $1,725.36 million to $1,305.09 million.

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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