Trade-Ideas LLC identified IDEXX Laboratories ( IDXX) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified IDEXX Laboratories as such a stock due to the following factors:

  • IDXX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $67.0 million.
  • IDXX has traded 1.5 million shares today.
  • IDXX is trading at 3.09 times the normal volume for the stock at this time of day.
  • IDXX crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. 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 on. 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 IDXX:

IDEXX Laboratories, Inc., together with its subsidiaries, develops, manufactures, and distributes products and services primarily for the companion animal veterinary, livestock and poultry, water testing, and dairy markets worldwide. IDXX has a PE ratio of 35. Currently there are 3 analysts that rate IDEXX Laboratories a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for IDEXX Laboratories has been 603,600 shares per day over the past 30 days. IDEXX has a market cap of $5.9 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.22 and a short float of 9.2% with 8.70 days to cover. Shares are down 11.3% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates IDEXX Laboratories as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and deteriorating net income.

Highlights from the ratings report include:
  • IDXX's revenue growth trails the industry average of 29.7%. Since the same quarter one year prior, revenues slightly increased by 6.0%. 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 gross profit margin for IDEXX LABS INC is rather high; currently it is at 59.69%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 10.88% is above that of the industry average.
  • IDEXX LABS INC's earnings per share declined by 6.8% 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, IDEXX LABS INC increased its bottom line by earning $1.78 versus $1.74 in the prior year. This year, the market expects an improvement in earnings ($2.06 versus $1.78).
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, IDXX has underperformed the S&P 500 Index, declining 17.95% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Net operating cash flow has decreased to $76.95 million or 17.49% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, IDEXX LABS INC has marginally lower results.

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