Today's Water-Logged And Getting Wetter Stock: Teva Pharmaceutical Industries (TEVA)

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 Teva Pharmaceutical Industries ( TEVA) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Teva Pharmaceutical Industries as such a stock due to the following factors:

  • TEVA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $273.9 million.
  • TEVA has traded 2.1 million shares today.
  • TEVA traded in a range 211.5% of the normal price range with a price range of $2.42.
  • TEVA traded below its daily resistance level (quality: 4 days, meaning that the stock is crossing a resistance level set by the last 4 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on TEVA:

Teva Pharmaceutical Industries Limited, together with its subsidiaries, develops, manufactures, sells, and distributes pharmaceutical products worldwide. The company offers generic pharmaceutical products; and basic chemicals, as well as specialized product families. The stock currently has a dividend yield of 2%. TEVA has a PE ratio of 38.0. Currently there are 12 analysts that rate Teva Pharmaceutical Industries a buy, no analysts rate it a sell, and 10 rate it a hold.

The average volume for Teva Pharmaceutical Industries has been 4.2 million shares per day over the past 30 days. Teva has a market cap of $48.4 billion and is part of the health care sector and drugs industry. Shares are up 44.7% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Teva Pharmaceutical Industries as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, attractive valuation levels, good cash flow from operations and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 42.19% over the past year, a rise that has exceeded that of the S&P 500 Index. 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.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Pharmaceuticals industry average. The net income increased by 23.2% when compared to the same quarter one year prior, going from $711.00 million to $876.00 million.
  • Net operating cash flow has significantly increased by 220.72% to $1,424.00 million when compared to the same quarter last year. In addition, TEVA PHARMACEUTICALS has also vastly surpassed the industry average cash flow growth rate of -19.54%.
  • The gross profit margin for TEVA PHARMACEUTICALS is rather high; currently it is at 62.87%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 17.31% trails the industry average.

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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