Trade-Ideas LLC identified Perrigo ( PRGO) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Perrigo as such a stock due to the following factors:

  • PRGO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $212.1 million.
  • PRGO has traded 628,581 shares today.
  • PRGO traded in a range 205.6% of the normal price range with a price range of $6.06.
  • PRGO traded below its daily resistance level (quality: 12 days, meaning that the stock is crossing a resistance level set by the last 12 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on PRGO:

Perrigo Company plc, through its subsidiaries, develops, manufactures, and markets over-the-counter (OTC) consumer goods and pharmaceutical products worldwide. The stock currently has a dividend yield of 0.3%. PRGO has a PE ratio of 154. Currently there are 7 analysts that rate Perrigo a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Perrigo has been 2.2 million shares per day over the past 30 days. Perrigo has a market cap of $21.9 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.63 and a short float of 2.1% with 1.98 days to cover. Shares are down 10.6% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Perrigo as a hold. 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 and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 3.6%. Since the same quarter one year prior, revenues rose by 41.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.06, which illustrates the ability to avoid short-term cash problems.
  • PERRIGO CO PLC has improved earnings per share by 6.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PERRIGO CO PLC reported lower earnings of $0.94 versus $1.65 in the prior year. This year, the market expects an improvement in earnings ($7.75 versus $0.94).
  • Net operating cash flow has decreased to $136.00 million or 30.29% 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.
  • PRGO has underperformed the S&P 500 Index, declining 5.41% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

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