After solidifying a long-term marketing agreement with Navidea Biopharmaceuticals in November, last month Cardinal Health settled longstanding claims with the DEA regarding not reporting unusually large shipments of opioids five years ago. The net effect of both these events should be reflected in the future guidance included in the company’s next quarterly earnings report scheduled for the end of this month.

There is no denying that Cardinal has underperformed the overall stock market during the past twelve months, declining 20% in value while the S&P 500 rose nearly 10%. But the stock appears to have bottomed out recently; CAH rose above its 50DMA three weeks ago and has remained there ever since, trading in a range between $72-74.

At that price CAH is valued at only 12 times forward earnings, while it is increasing annual revenue at a 14% rate. For those reasons CAH scores highly from both the value and growth components of our Rapid Profits Matrix. We still have six weeks left on this trade, plenty of time to hit our $82 target price with a little good news at the end of this month.