Don't Miss Today's Strong And Under The Radar Stock: Omnicare (OCR)

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 Omnicare ( OCR) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Omnicare as such a stock due to the following factors:

  • OCR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $114.0 million.
  • OCR has traded 3268.69000000000005456968210637569427490234375 options contracts today.
  • OCR is making at least a new 3-day high.
  • OCR has a PE ratio of 5.
  • OCR is mentioned 1.77 times per day on StockTwits.
  • OCR has not yet been mentioned on StockTwits today.
  • OCR is currently in the upper 20% of its 1-year range.
  • OCR is in the upper 35% of its 20-day range.
  • OCR is in the upper 45% of its 5-day range.
  • OCR is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on OCR:

Omnicare, Inc. operates as a healthcare services company that specializes in the management of pharmaceutical care in the United States. The stock currently has a dividend yield of 0.9%. OCR has a PE ratio of 5. Currently there are 2 analysts that rate Omnicare a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Omnicare has been 2.6 million shares per day over the past 30 days. Omnicare has a market cap of $9.3 billion and is part of the health care sector and health services industry. The stock has a beta of 0.47 and a short float of 11% with 8.88 days to cover. Shares are up 31.1% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Omnicare as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 54.6% when compared to the same quarter one year prior, rising from $21.97 million to $33.97 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.1%. Since the same quarter one year prior, revenues slightly increased by 7.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.73, and is less than that of the industry average, implying that there has been a relatively successful effort in the 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.
  • The gross profit margin for OMNICARE INC is rather low; currently it is at 21.74%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.95% trails that of the industry average.
  • Net operating cash flow has significantly decreased to $94.09 million or 57.01% 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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