Water-Logged And Getting Wetter: Cooper Companies (COO)

Trade-Ideas LLC identified Cooper Companies ( COO) 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 Cooper Companies as such a stock due to the following factors:

  • COO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $78.3 million.
  • COO has traded 841,281 shares today.
  • COO traded in a range 286.3% of the normal price range with a price range of $9.17.
  • COO traded below its daily resistance level (quality: 1 day, meaning that the stock is crossing a resistance level set by the last 1 calendar day. 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 COO:

The Cooper Companies, Inc. operates as a medical device company worldwide. The stock currently has a dividend yield of 0%. COO has a PE ratio of 42. Currently there are 8 analysts that rate Cooper Companies a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Cooper Companies has been 366,700 shares per day over the past 30 days. Cooper Companies has a market cap of $8.0 billion and is part of the health care sector and health services industry. The stock has a beta of 0.49 and a short float of 6% with 4.68 days to cover. Shares are up 24.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Cooper Companies as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • COO's revenue growth trails the industry average of 30.8%. Since the same quarter one year prior, revenues slightly increased by 1.0%. 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.
  • Net operating cash flow has increased to $89.54 million or 12.14% when compared to the same quarter last year. In addition, COOPER COMPANIES INC has also modestly surpassed the industry average cash flow growth rate of 7.78%.
  • The current debt-to-equity ratio, 0.53, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.85 is somewhat weak and could be cause for future problems.
  • The gross profit margin for COOPER COMPANIES INC is rather high; currently it is at 69.67%. Regardless of COO'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 11.42% trails the industry average.

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