Trade-Ideas LLC identified Perrigo ( PRGO) as a weak on high relative volume 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 $307.7 million.
  • PRGO has traded 323,304 shares today.
  • PRGO is trading at 2.81 times the normal volume for the stock at this time of day.
  • PRGO is trading at a new low 3.02% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. 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 (or avoid losses by trimming weak positions). 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 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 0.4%. PRGO has a PE ratio of 134. Currently there are 8 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 1.7 million shares per day over the past 30 days. Perrigo has a market cap of $19.1 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.70 and a short float of 4.7% with 2.70 days to cover. Shares are down 10.6% year-to-date as of the close of trading on Friday.

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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 and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 1.9%. Since the same quarter one year prior, revenues rose by 33.0%. 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.
  • 39.25% is the gross profit margin for PERRIGO CO PLC which we consider to be strong. Regardless of PRGO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PRGO's net profit margin of -7.50% significantly underperformed when compared to the industry average.
  • PERRIGO CO PLC 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. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse 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 ($9.75 versus $0.94).
  • The share price of PERRIGO CO PLC is down 13.42% when compared to where it was trading one year earlier. This reflects both (a) the trend in the overall market as well as (b) the sharp decline in the company's earnings per share. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Pharmaceuticals industry. The net income has significantly decreased by 252.4% when compared to the same quarter one year ago, falling from $70.20 million to -$107.00 million.

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