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

  • JAZZ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $151.6 million.
  • JAZZ has a PE ratio of 340.9.
  • JAZZ is currently in the upper 30% of its 1-year range.
  • JAZZ is in the upper 25% of its 20-day range.
  • JAZZ is in the upper 35% of its 5-day range.
  • JAZZ is currently trading above yesterday's high.
  • JAZZ has experienced a gap between today's open and yesterday's close of 0.6%.

'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 JAZZ:

Jazz Pharmaceuticals Public Limited Company, a specialty biopharmaceutical company, identifies, develops, and commercializes pharmaceutical products for various medical needs in the United States, Europe, and internationally. JAZZ has a PE ratio of 340.9. Currently there are 10 analysts that rate Jazz Pharmaceuticals a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Jazz Pharmaceuticals has been 820,100 shares per day over the past 30 days. Jazz has a market cap of $10.3 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.08 and a short float of 4.7% with 2.72 days to cover. Shares are up 34.7% year-to-date as of the close of trading on Tuesday.

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 Jazz Pharmaceuticals as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and premium valuation.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 8.8%. Since the same quarter one year prior, revenues rose by 32.0%. 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.
  • The gross profit margin for JAZZ PHARMACEUTICALS PLC is currently very high, coming in at 91.25%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, JAZZ's net profit margin of 8.40% significantly trails the industry average.
  • Compared to its closing price of one year ago, JAZZ's share price has jumped by 51.69%, exceeding the performance of the broader market during that same time frame. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
  • 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 significantly decreased by 65.8% when compared to the same quarter one year ago, falling from $75.41 million to $25.77 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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