Strong And Under The Radar: Molina Healthcare (MOH)

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 Molina Healthcare ( MOH) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Molina Healthcare as such a stock due to the following factors:

  • MOH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $29.2 million.
  • MOH is making at least a new 3-day high.
  • MOH has a PE ratio of 121.2.
  • MOH is mentioned 1.58 times per day on StockTwits.
  • MOH has not yet been mentioned on StockTwits today.
  • MOH is currently in the upper 20% of its 1-year range.
  • MOH is in the upper 35% of its 20-day range.
  • MOH is in the upper 45% of its 5-day range.
  • MOH is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on MOH:

Molina Healthcare, Inc. provides Medicaid-related solutions to meet the health care needs of low-income families and individuals; and to assist state agencies in their administration of the Medicaid program. The company operates through two segments, Health Plans and Molina Medicaid Solutions. MOH has a PE ratio of 121.2. Currently there are 5 analysts that rate Molina Healthcare a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Molina Healthcare has been 758,600 shares per day over the past 30 days. Molina Healthcare has a market cap of $2.4 billion and is part of the health care sector and health services industry. The stock has a beta of 1.44 and a short float of 19.1% with 10.17 days to cover. Shares are up 45.1% 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 Molina Healthcare 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, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 19.9%. Since the same quarter one year prior, revenues rose by 47.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.94, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.48, which illustrates the ability to avoid short-term cash problems.
  • MOLINA HEALTHCARE INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MOLINA HEALTHCARE INC increased its bottom line by earning $0.96 versus $0.25 in the prior year. This year, the market expects an improvement in earnings ($1.16 versus $0.96).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 113.0% when compared to the same quarter one year prior, rising from $7.57 million to $16.12 million.
  • Net operating cash flow has significantly increased by 171.03% to $605.74 million when compared to the same quarter last year. In addition, MOLINA HEALTHCARE INC has also vastly surpassed the industry average cash flow growth rate of -20.30%.

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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