Trade of the Day: AmerisourceBergen Corp. (ABC)

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Plummeting oil prices continue to be a driving force in the market, keeping investors on their toes as volatility remains high. The Turner Analytics data indicates a weakening market, but the downward trending short-sell indicator of the Oscillator is still trending in a bullish direction. So I plan on taking advantage of this bullish trend, before it loses steam.

To do this, today, I’d like to focus on a healthcare stock that has proven to have long-term growth. AmerisourceBergen Corp. (NYSE:ABC) is a pharmaceutical distribution company that, with the exception of sell-off a little less than a year ago, has been trending nicely upward for nearly three years.

There has been some decent insider buying just a little over a month ago, and ABC’s institutional ownership above 75%. Remember, insiders buy because they believe the company is undervalued and are willing to put their personal money on that opinion.

There has also been increasing trading volume over the past few weeks on increasing share prices.  The Industry (Drugs Wholesale) and Sector (Healthcare) are also in a very strongly bullish trend. The fundamentals are strong and the technical trending on the stock is even stronger, with a Demand Fundamental score of 63 out of 100 and a Demand Technical score of 87 out of 100.

The Turner Analytics rating is “Bullish,” with a total score of 154 out of 200. ABC’s quarter-to-quarter revenue growth, quarter-to-quarter earnings growth, and year-to-year revenue growth all earn a 5 out 5 rating. So it’s not surprising that in the last quarter ABC beat analysts’ EPS estimates by 4.8%, and the company recently increased its dividend yield by 23% to $0.29 per share.

trending

Overall, I think AmerisourceBergen Corporation is a solid buy with a strong long-term outlook. ABC’s volatility is moderate with an expected move of $5.08 or 5.6%.

I recommend entering this trade at $91.08 or better and setting a stop at $85.68.

Mike Turner and his team of software engineers developed Turner Analytics, a sophisticated software market and trade-timing system that provides unbiased, quantifiable recommendations on thousands of equities and rates, ranks and scores these equities from best to worst in an easy-to-use on-line tool for individual investors. He is also the editor of Signal Investor.


Article printed from InvestorPlace Media, https://investorplace.com/2014/12/abc-trending-up/.

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