Today's Momo Momentum Stock To Watch: Regeneron Pharmaceuticals (REGN)

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 Regeneron Pharmaceuticals ( REGN) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Regeneron Pharmaceuticals as such a stock due to the following factors:

  • REGN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $350.6 million.
  • REGN has a PE ratio of 127.7.
  • REGN is currently in the upper 30% of its 1-year range.
  • REGN is in the upper 25% of its 20-day range.
  • REGN is in the upper 35% of its 5-day range.
  • REGN is currently trading above yesterday's high.
  • REGN has experienced a gap between today's open and yesterday's close of 1.1%.

'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.

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More details on REGN:

Regeneron Pharmaceuticals, Inc., a biopharmaceutical company, discovers, invents, develops, manufactures, and commercializes medicines for the treatment of serious medical conditions in the United States and internationally. REGN has a PE ratio of 127.7. Currently there are 10 analysts that rate Regeneron Pharmaceuticals a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Regeneron Pharmaceuticals has been 776,900 shares per day over the past 30 days. Regeneron has a market cap of $37.7 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.60 and a short float of 4.9% with 4.22 days to cover. Shares are up 40.2% 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 Regeneron Pharmaceuticals as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • REGN's revenue growth trails the industry average of 42.1%. Since the same quarter one year prior, revenues rose by 21.6%. 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.
  • REGN's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 4.80, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has significantly increased by 76.90% to $163.56 million when compared to the same quarter last year. In addition, REGENERON PHARMACEUTICALS has also vastly surpassed the industry average cash flow growth rate of 19.77%.
  • Compared to its closing price of one year ago, REGN's share price has jumped by 30.75%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • REGENERON PHARMACEUTICALS's earnings per share declined by 44.0% 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 year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, REGENERON PHARMACEUTICALS reported lower earnings of $3.80 versus $6.61 in the prior year. This year, the market expects an improvement in earnings ($10.08 versus $3.80).

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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