Stock of the Week

IQVIA Holdings (IQV) is based in Durham, North Carolina and was founded in 1982.

The company provides integrated information and technology-enabled healthcare services globally and operates in three segments: Commercial Solutions, Research & Development Solutions, and Integrated Engagement Services.

The company was formerly known as Quintiles IMS Holdings, Inc. and changed its name to IQVIA Holdings Inc. in November 2017.

IQVIA has seen earnings per share grow at a rate of 20% per year over the last three years while sales have grown at a rate of 19% over the same period.

EPS are expected to grow by 16% this year and next with analysts expecting average growth of 14.3% over the next five years.

Sales grew by 65% in the most recent quarter and are expected to grow by 50% for the year (2017). The company sports a return on equity of 15.1%, a profit margin of 13.1% and an operating margin of 11%.

IQV has formed a trend channel over the last two years and it is close to the lower rail of the channel at this time. The 10-week RSI and the weekly stochastic readings are at their lowest levels since the fourth quarter of ’16. We also see that the 52-week moving average is just below the lower rail of the channel, giving the stock a second layer of support.

The sentiment toward IQV hit an extreme bearish reading last Thursday that was the lowest toward the stock since June 27, 2016. That previous low reading came just as the stock was hitting a low that would become the lower rail of the channel that has prevailed over the last few years. The stock gained almost 30% over the next six weeks.

Suggested strategy: Buy IQV with a maximum entry price of $101.00. I would set a target of at least $130 in the next three months, for a 30%-plus potential return. I would also set a stop-loss at $90. One note of caution, IQV does come out with earnings tomorrow (2/14/18), so if you are more risk averse, you may want to wait until after the earnings report before buying the stock.

— Rick Pendergraft