Eli Lilly And (LLY) Is Today's Strong On High Volume Stock

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

  • LLY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $257.8 million.
  • LLY has traded 2.7 million shares today.
  • LLY is trading at 7.05 times the normal volume for the stock at this time of day.
  • LLY is trading at a new high 3.02% 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 LLY:

Eli Lilly and Company discovers, develops, manufactures, and sells pharmaceutical products worldwide. It operates in two segments, Human Pharmaceutical Products and Animal Health products. The stock currently has a dividend yield of 2.7%. LLY has a PE ratio of 37. Currently there are 6 analysts that rate Eli Lilly and a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Eli Lilly and has been 4.1 million shares per day over the past 30 days. Eli Lilly and has a market cap of $83.1 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.40 and a short float of 2% with 7.30 days to cover. Shares are up 10.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Eli Lilly and as a buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The gross profit margin for LILLY (ELI) & CO is currently very high, coming in at 83.39%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, LLY's net profit margin of 11.40% significantly trails the industry average.
  • Compared to its closing price of one year ago, LLY's share price has jumped by 25.73%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp 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 other strengths this company displays justify these higher price levels.
  • The current debt-to-equity ratio, 0.55, 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 0.95 is somewhat weak and could be cause for future problems.
  • LILLY (ELI) & CO's earnings per share declined by 26.5% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, LILLY (ELI) & CO reported lower earnings of $2.23 versus $4.31 in the prior year. This year, the market expects an improvement in earnings ($3.16 versus $2.23).
  • LLY, with its decline in revenue, slightly underperformed the industry average of 1.9%. Since the same quarter one year prior, revenues slightly dropped by 0.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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