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

  • ILMN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $181.0 million.
  • ILMN has a PE ratio of 80.7.
  • ILMN is currently in the upper 30% of its 1-year range.
  • ILMN is in the upper 25% of its 20-day range.
  • ILMN is in the upper 35% of its 5-day range.
  • ILMN is currently trading above yesterday's high.
  • ILMN 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 ILMN:

Illumina, Inc. provides sequencing and array-based solutions for genetic analysis in North America, Europe, Latin America, the Asia-Pacific, the Middle East, and South Africa. ILMN has a PE ratio of 80.7. Currently there are 12 analysts that rate Illumina a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Illumina has been 1.1 million shares per day over the past 30 days. Illumina has a market cap of $27.5 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.60 and a short float of 2% with 3.17 days to cover. Shares are up 3.6% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Illumina as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, notable return on equity 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:
  • The revenue growth came in higher than the industry average of 16.7%. Since the same quarter one year prior, revenues rose by 32.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ILLUMINA INC reported significant earnings per share improvement 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, ILLUMINA INC increased its bottom line by earning $2.37 versus $0.86 in the prior year. This year, the market expects an improvement in earnings ($3.18 versus $2.37).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Life Sciences Tools & Services industry. The net income increased by 90.0% when compared to the same quarter one year prior, rising from $80.66 million to $153.28 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Life Sciences Tools & Services industry and the overall market, ILLUMINA INC's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for ILLUMINA INC is currently very high, coming in at 75.46%. Regardless of ILMN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ILMN's net profit margin of 29.91% significantly outperformed against the industry.

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