Strong On High Relative Volume: Endo International (ENDP)

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 Endo International ( ENDP) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Endo International as such a stock due to the following factors:

  • ENDP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $181.8 million.
  • ENDP has traded 762,097 shares today.
  • ENDP is trading at 5.08 times the normal volume for the stock at this time of day.
  • ENDP is trading at a new high 3.05% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on ENDP:

Endo International plc, a specialty healthcare company, focuses on branded and generic pharmaceuticals and devices worldwide. It operates through four segments: U.S. Branded Pharmaceuticals, U.S. Generic Pharmaceuticals, Devices, and International Pharmaceuticals. The U.S. Currently there are 11 analysts that rate Endo International a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Endo International has been 2.3 million shares per day over the past 30 days. Endo International has a market cap of $15.3 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.21 and a short float of 6.7% with 4.72 days to cover. Shares are up 12% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Endo International as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • ENDP's very impressive revenue growth greatly exceeded the industry average of 8.0%. Since the same quarter one year prior, revenues leaped by 51.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • ENDO INTERNATIONAL PLC 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, ENDO INTERNATIONAL PLC continued to lose money by earning -$2.23 versus -$4.67 in the prior year. This year, the market expects an improvement in earnings ($4.53 versus -$2.23).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Pharmaceuticals industry. The net income increased by 82.7% when compared to the same quarter one year prior, rising from -$436.91 million to -$75.72 million.
  • Net operating cash flow has significantly increased by 66.02% to -$89.81 million when compared to the same quarter last year. In addition, ENDO INTERNATIONAL PLC has also vastly surpassed the industry average cash flow growth rate of -21.42%.

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