Becton Dickinson (BDX) Showing Signs Of Being Water-Logged And Getting Wetter

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 Becton Dickinson ( BDX) 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 Becton Dickinson as such a stock due to the following factors:

  • BDX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $155.0 million.
  • BDX has traded 487,893 shares today.
  • BDX traded in a range 233.9% of the normal price range with a price range of $4.30.
  • BDX traded below its daily resistance level (quality: 4 days, meaning that the stock is crossing a resistance level set by the last 4 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 BDX:

Becton, Dickinson and Company, a medical technology company, develops, manufactures, and sells medical devices, instrument systems, and reagents worldwide. The company's BD Medical segment produces medical devices that are used in various healthcare settings. The stock currently has a dividend yield of 1.7%. BDX has a PE ratio of 26.1. Currently there are 6 analysts that rate Becton Dickinson a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Becton Dickinson has been 1.3 million shares per day over the past 30 days. Becton Dickinson has a market cap of $24.7 billion and is part of the health care sector and health services industry. The stock has a beta of 0.95 and a short float of 4.2% with 6.61 days to cover. Shares are up 15.3% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Becton Dickinson as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, reasonable valuation levels, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • BDX's revenue growth has slightly outpaced the industry average of 3.7%. Since the same quarter one year prior, revenues slightly increased by 5.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. 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 BECTON DICKINSON & CO is rather high; currently it is at 58.00%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.11% is above that of the industry average.
  • Net operating cash flow has increased to $439.00 million or 11.70% when compared to the same quarter last year. In addition, BECTON DICKINSON & CO has also vastly surpassed the industry average cash flow growth rate of -40.74%.

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