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.

Trade-Ideas LLC identified Abbott Laboratories ( ABT) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Abbott Laboratories as such a stock due to the following factors:

  • ABT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $184.4 million.
  • ABT has a PE ratio of 41.5.
  • ABT is currently in the upper 30% of its 1-year range.
  • ABT is in the upper 25% of its 20-day range.
  • ABT is in the upper 35% of its 5-day range.
  • ABT is currently trading above yesterday's high.
  • ABT has experienced a gap between today's open and yesterday's close of 0.7%.

'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 ABT:

Abbott Laboratories manufactures and sells health care products worldwide. The stock currently has a dividend yield of 2.1%. ABT has a PE ratio of 41.5. Currently there are 13 analysts that rate Abbott Laboratories a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Abbott Laboratories has been 5.4 million shares per day over the past 30 days. Abbott has a market cap of $70.2 billion and is part of the health care sector and health services industry. The stock has a beta of 1.02 and a short float of 0.8% with 3.16 days to cover. Shares are up 2.7% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Abbott Laboratories as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • ABT's revenue growth has slightly outpaced the industry average of 0.8%. Since the same quarter one year prior, revenues slightly increased by 6.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income increased by 54.0% when compared to the same quarter one year prior, rising from $589.00 million to $907.00 million.
  • The gross profit margin for ABBOTT LABORATORIES is rather high; currently it is at 61.48%. 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 16.93% trails the industry average.
  • The current debt-to-equity ratio, 0.36, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.76 is somewhat weak and could be cause for future problems.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.

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