Merck (MRK) Flagged As Today's Pre-Market Laggard

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 Merck ( MRK) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Merck as such a stock due to the following factors:

  • MRK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $779.3 million.
  • MRK traded 51,369 shares today in the pre-market hours as of 8:35 AM.
  • MRK is down 3.4% today from yesterday's close.

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More details on MRK:

Merck & Co., Inc. provides various health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products worldwide. The stock currently has a dividend yield of 3%. MRK has a PE ratio of 20.6. Currently there are 6 analysts that rate Merck a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Merck has been 10.3 million shares per day over the past 30 days. Merck has a market cap of $171.8 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.54 and a short float of 0.8% with 1.78 days to cover. Shares are up 18.4% year-to-date as of the close of trading on Thursday.

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 Merck as a buy. The company's strengths can be seen in multiple areas, such as its 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:
  • Compared to its closing price of one year ago, MRK's share price has jumped by 28.93%, exceeding the performance of the broader market during that same time frame. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 8.8%. Since the same quarter one year prior, revenues slightly dropped by 4.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The gross profit margin for MERCK & CO is rather high; currently it is at 64.80%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, MRK's net profit margin of 8.47% is significantly lower than the industry average.
  • MERCK & CO's earnings per share declined by 18.4% 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, MERCK & CO reported lower earnings of $1.46 versus $2.00 in the prior year. This year, the market expects an improvement in earnings ($3.49 versus $1.46).
  • 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 20.4% when compared to the same quarter one year ago, dropping from $1,124.00 million to $895.00 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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