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 Bristol-Myers Squibb Company ( BMY) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Bristol-Myers Squibb Company as such a stock due to the following factors:

  • BMY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $426.0 million.
  • BMY has a PE ratio of 53.1.
  • BMY is currently in the upper 30% of its 1-year range.
  • BMY is in the upper 25% of its 20-day range.
  • BMY is in the upper 35% of its 5-day range.
  • BMY is currently trading above yesterday's high.
  • BMY has experienced a gap between today's open and yesterday's close of 1.9%.

'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 BMY:

Bristol-Myers Squibb Company discovers, develops, licenses, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. The stock currently has a dividend yield of 2.3%. BMY has a PE ratio of 53.1. Currently there are 8 analysts that rate Bristol-Myers Squibb Company a buy, 1 analyst rates it a sell, and 6 rate it a hold.

The average volume for Bristol-Myers Squibb Company has been 6.1 million shares per day over the past 30 days. Bristol-Myers Squibb has a market cap of $106.1 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.86 and a short float of 1.3% with 3.45 days to cover. Shares are up 10.7% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Bristol-Myers Squibb Company as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and disappointing return on equity.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.53, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.26, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for BRISTOL-MYERS SQUIBB CO is currently very high, coming in at 82.62%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, BMY's net profit margin of 0.30% significantly trails the industry average.
  • Compared to its closing price of one year ago, BMY's share price has jumped by 29.66%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • 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 98.2% when compared to the same quarter one year ago, falling from $726.00 million to $13.00 million.
  • Net operating cash flow has significantly decreased to $572.00 million or 59.43% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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