Don't Miss Today's Strong And Under The Radar Stock: WuXi PharmaTech (WX)

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

  • WX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $32.8 million.
  • WX has traded 545.2989999999999781721271574497222900390625 options contracts today.
  • WX is making at least a new 3-day high.
  • WX has a PE ratio of 28.
  • WX is mentioned 1.19 times per day on StockTwits.
  • WX has not yet been mentioned on StockTwits today.
  • WX is currently in the upper 20% of its 1-year range.
  • WX is in the upper 35% of its 20-day range.
  • WX is in the upper 45% of its 5-day range.
  • WX 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 WX:

Wuxi PharmaTech (Cayman) Inc. operates as a pharmaceutical, biotechnology, and medical device research and development services company in China and the United States. It operates through two segments, Laboratory Services and Manufacturing Services. WX has a PE ratio of 28. Currently there are 3 analysts that rate WuXi PharmaTech a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for WuXi PharmaTech has been 581,700 shares per day over the past 30 days. WuXi PharmaTech has a market cap of $3.2 billion and is part of the health care sector and health services industry. Shares are up 35.1% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates WuXi PharmaTech as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.2%. Since the same quarter one year prior, revenues rose by 23.1%. 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.
  • WX's debt-to-equity ratio is very low at 0.21 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, WX has a quick ratio of 1.97, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 35.52% is the gross profit margin for WUXI PHARMATECH (CAYMAN)-ADR which we consider to be strong. Regardless of WX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 7.06% trails the industry average.
  • 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, despite the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • WUXI PHARMATECH (CAYMAN)-ADR has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, WUXI PHARMATECH (CAYMAN)-ADR reported lower earnings of $1.56 versus $1.58 in the prior year. For the next year, the market is expecting a contraction of 1.9% in earnings ($1.53 versus $1.56).

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