Trade-Ideas: International Paper (IP) Is Today's "Barbarian At The Gate" Stock
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.Trade-Ideas LLC identified International Paper (IP) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified International Paper as such a stock due to the following factors:
- IP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $168.9 million.
- IP has traded 793,517 shares today.
- IP traded in a range 201.5% of the normal price range with a price range of $1.58.
- IP traded above its daily resistance level (quality: 7 days, meaning that the stock is crossing a resistance level set by the last 7 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock s movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.EXCLUSIVE OFFER: Get the inside scoop on opportunities in IP with the Ticky from Trade-Ideas. See the FREE profile for IP NOW at Trade-IdeasMore details on IP: International Paper Company operates as a paper and packaging company in North America, Europe, Latin America, Russia, Asia, and North Africa. The stock currently has a dividend yield of 2.6%. IP has a PE ratio of 24.3. Currently there are 13 analysts that rate International Paper a buy, no analysts rate it a sell, and 1 rates it a hold.The average volume for International Paper has been 3.6 million shares per day over the past 30 days. International has a market cap of $20.9 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.52 and a short float of 1.6% with 2.15 days to cover. Shares are up 17.7% year to date as of the close of trading on Wednesday.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.TheStreetRatings.com Analysis:TheStreet Quant Ratings rates International Paper as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Paper & Forest Products industry average. The net income increased by 69.1% when compared to the same quarter one year prior, rising from $188.00 million to $318.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.6%. Since the same quarter one year prior, revenues slightly increased by 6.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 54.76% and other important driving factors, this stock has surged by 48.06% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- INTL PAPER CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, INTL PAPER CO reported lower earnings of $1.71 versus $2.94 in the prior year. This year, the market expects an improvement in earnings ($3.45 versus $1.71).
- The gross profit margin for INTL PAPER CO is rather low; currently it is at 19.73%. Regardless of IP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, IP's net profit margin of 4.48% compares favorably to the industry average.
- You can view the full International Paper Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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