Eli Lilly And (LLY) Shows Signs Of Being Water-Logged And Getting Wetter

Trade-Ideas LLC identified Eli Lilly and ( LLY) 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 Eli Lilly and as such a stock due to the following factors:

  • LLY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $316.3 million.
  • LLY has traded 611,483 shares today.
  • LLY traded in a range 209.4% of the normal price range with a price range of $2.34.
  • LLY traded below its daily resistance level (quality: 20 days, meaning that the stock is crossing a resistance level set by the last 20 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 LLY:

Eli Lilly and Company discovers, develops, manufactures, and markets pharmaceutical products worldwide. It operates through two segments, Human Pharmaceutical Products and Animal Health Products. The stock currently has a dividend yield of 2.5%. LLY has a PE ratio of 36. Currently there are 8 analysts that rate Eli Lilly and a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Eli Lilly and has been 4.2 million shares per day over the past 30 days. Eli Lilly and has a market cap of $91.5 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.11 and a short float of 0.9% with 2.20 days to cover. Shares are down 1.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Eli Lilly and as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth and expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • LILLY (ELI) & CO has improved earnings per share by 26.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, LILLY (ELI) & CO increased its bottom line by earning $2.26 versus $2.23 in the prior year. This year, the market expects an improvement in earnings ($3.59 versus $2.26).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Pharmaceuticals industry average. The net income increased by 24.4% when compared to the same quarter one year prior, going from $600.80 million to $747.70 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.6%. Since the same quarter one year prior, revenues slightly increased by 8.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for LILLY (ELI) & CO is currently very high, coming in at 72.89%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 13.83% trails the industry average.
  • In its most recent trading session, LLY has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Despite the decline in its share price over the last year, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry. We feel, however, that other strengths this company displays compensate for this.

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