Trade-Ideas: Bio-Techne (TECH) Is Today's

Trade-Ideas LLC identified Bio-Techne ( TECH) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Bio-Techne as such a stock due to the following factors:

  • TECH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $23.6 million.
  • TECH has traded 179,661 shares today.
  • TECH is down 3% today.
  • TECH was up 5.4% yesterday.

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More details on TECH:

Bio-Techne Corporation, together with its subsidiaries, develops, manufactures, and sells biotechnology reagents, instruments, and clinical diagnostic products worldwide. The company operates through three segments: Biotechnology, Clinical Controls, and Protein Platforms. The stock currently has a dividend yield of 1.6%. TECH has a PE ratio of 29. Currently there are 3 analysts that rate Bio-Techne a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Bio-Techne has been 213,900 shares per day over the past 30 days. Bio-Techne has a market cap of $3.0 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.65 and a short float of 6.2% with 8.04 days to cover. Shares are down 4.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Bio-Techne as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. 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:
  • TECH's revenue growth has slightly outpaced the industry average of 3.5%. Since the same quarter one year prior, revenues slightly increased by 3.6%. 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.
  • TECH's debt-to-equity ratio is very low at 0.20 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.53, which clearly demonstrates the ability to cover short-term cash needs.
  • BIO-TECHNE CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, BIO-TECHNE CORP reported lower earnings of $2.89 versus $2.99 in the prior year. This year, the market expects an improvement in earnings ($3.45 versus $2.89).
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, TECH has underperformed the S&P 500 Index, declining 12.77% 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 $31.83 million or 11.97% 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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