Pfizer (PFE) Marked As A Barbarian At The Gate

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 Pfizer ( PFE) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Pfizer as such a stock due to the following factors:

  • PFE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $818.8 million.
  • PFE has traded 3.5 million shares today.
  • PFE traded in a range 252.3% of the normal price range with a price range of $1.26.
  • PFE traded above its daily resistance level (quality: 527 days, meaning that the stock is crossing a resistance level set by the last 527 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on PFE:

Pfizer Inc. discovers, develops, manufactures, and sells healthcare products worldwide. It offers medicines and vaccines, and various consumer healthcare products. The stock currently has a dividend yield of 3.2%. PFE has a PE ratio of 19.7. Currently there are 8 analysts that rate Pfizer a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Pfizer has been 25.6 million shares per day over the past 30 days. Pfizer has a market cap of $201.4 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.74 and a short float of 1.1% with 2.56 days to cover. Shares are up 4.3% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Pfizer as a buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • PFIZER INC has improved earnings per share by 7.7% 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, PFIZER INC increased its bottom line by earning $1.65 versus $1.20 in the prior year. This year, the market expects an improvement in earnings ($2.25 versus $1.65).
  • The current debt-to-equity ratio, 0.48, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, PFE has a quick ratio of 2.18, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for PFIZER INC is currently very high, coming in at 84.33%. Regardless of PFE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PFE's net profit margin of 21.56% compares favorably to the industry average.
  • 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 2.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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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