Few Indicators Flashing Warning Signs for Cardinal Health, Inc. (CAH)

Let’s reassess the active stocks with an eye toward CAH stock. Just how should we respond to Tuesday’s drubbing? Is the mighty fruit now destined to decay? Or is this a mere bruising and nothing more? On 12 February, shares of Cardinal Health, Inc. (NYSE:CAH) closed higher after a volatile session. The shares accumulated 1.34 points or 2.52 percent at $54.53 with a heavy trade volume of 3.663 million shares. After opening the session at $53.61, the shares went as high as $54.66 and as low as $53.38, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $16.7 billion and now has 306.88 million shares outstanding. Cardinal Health, Inc. (CAH) stock has gained 14.58 percent of market value in 21 trading days.

CAH stock has a trailing 3-year beta of 1.17, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was -$0.09 a share in the trailing twelve months. The stock’s value has surged 22.26 percent year to date (YTD) against a decline of -18.27 percent in 12 month’s time. The company’s shares still trade -25.54 percent away from its 1-year high of $73.23 and 29.31 percent up from 52-week low of $42.17. The average consensus rating on the company is 2.9, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Cardinal Health, Inc. (CAH) will probably climb -1.94 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $60 price as 12-month high target. This represents a whopping 10.03 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $55, which represents a return potential of 0.86 percent when compared to the closing price of the stock of $54.53 on Tuesday, February 12. The lowest price target for the stock is $50 — slightly more than -8.31 percent from CAH’s current share price.

History has shown that shares in Cardinal Health, Inc. have gone down on 18 different earnings reaction days and are predicted to add 0.03 percent when the company reports upcoming earnings. Investors will get their next glimpse of CAH’s Q3 earnings on May 02. Analysts are forecasting revenue to climb 2.6 percent to $36.1B in the fiscal third quarter, while earnings are seen soaring by nearly -27.81 percent to $1.09 per share. It earned $1.29 per share, better than the $1.08, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $37.7B, better than the $36.1B analysts expected. Earnings are estimated to increase by -150.4 percent this year, 6.4 percent next year and continue to increase by 6.3 percent annually for the next 5 years.

Let’s take a look at some insider activity at Cardinal Health, Inc. (NYSE:CAH) and see the pattern. The earliest insider trade took place on 11/13/2018. Laws Stuart G parted with a total of 0.8 thousand shares of company at average share price of $55.55. The total for the sales was set at $44.66 thousand. After this transaction, the SVP & Chief Accounting Officer account balance stood at 6.3 thousand shares. The stock lost -1.84 percent since that insider sale. On 08/20/2018, Giacomin Jon L, CEO, Medical Segment, sold 2.89 thousand shares at a price per share of $51.95. This removed 150.14 thousand shares from the insider’s fortune and the stock saw a 4.97 percent rally in value since the news became public. This transaction left 72.65 thousand shares in the CEO, Medical Segment account.

On 02/20/2018, CEO, Medical Segment Giacomin Jon L performed a sale transaction worth $549.9 thousand. This sale at $68.78 each has eliminated 8 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -20.72 percent decrease since the transaction was reported. The insider now is left with 55.05 thousand shares remaining in the account. Morrison Patricia, who performs the Chief Information Officer job, sold 28.53 thousand shares for $1.89 million. The disposal occurred on 02/14/2018 was priced at $66.3 per share. The share price plunged -17.75 percent since the reporting date. Morrison Patricia now left with a stake of 34.98 thousand CAH stock worth $1.91 million after the insider selling.

The stock is currently hovering around the first support level of $53.72. Below this, the next support is placed in the zone of $52.91. Till the time, the CAH stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 66.6 on daily chart, which may remain a cause for concern. If the price breaks below $52.91 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $55 mark may result into a pull-back move towards $55.47 level.

Further, it is sporting a 0.12 on the Price-to-Sales ratio. Compare this with the industry average P/S of 19.81. 5 percent is the gross profit margin for Cardinal Health, Inc. and operating margin sits at 0.6 percent. Along with this, the net profit margin is 0 percent.