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Trade-Ideas: Mindray Medical International (MR) 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 Mindray Medical International ( MR) 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 Mindray Medical International as such a stock due to the following factors:

  • MR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $27.4 million.
  • MR has traded 542,239 shares today.
  • MR traded in a range 226.5% of the normal price range with a price range of $1.49.
  • MR traded above its daily resistance level (quality: 11 days, meaning that the stock is crossing a resistance level set by the last 11 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 MR with the Ticky from Trade-Ideas. See the FREE profile for MR NOW at Trade-Ideas

More details on MR:

Mindray Medical International Limited, through its subsidiary, Shenzhen Mindray, develops, manufactures, and markets medical devices worldwide. It operates in three segments: Patient Monitoring and Life Support Products, In-Vitro Diagnostic Products, and Medical Imaging Systems. The stock currently has a dividend yield of 1.1%. MR has a PE ratio of 23.2. Currently there are 4 analysts that rate Mindray Medical International a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for Mindray Medical International has been 669,900 shares per day over the past 30 days. Mindray Medical International has a market cap of $4.8 billion and is part of the health care sector and health services industry. Shares are up 24.1% year to date as of the close of trading on Friday.

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 Mindray Medical International as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year, impressive record of earnings per share growth and compelling growth in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 1.8%. Since the same quarter one year prior, revenues rose by 14.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • MR's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.94, which clearly demonstrates the ability to cover short-term cash needs.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • MINDRAY MEDICAL INTL has improved earnings per share by 15.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MINDRAY MEDICAL INTL increased its bottom line by earning $1.53 versus $1.40 in the prior year. This year, the market expects an improvement in earnings ($1.98 versus $1.53).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Health Care Equipment & Supplies industry average. The net income increased by 19.3% when compared to the same quarter one year prior, going from $52.01 million to $62.05 million.

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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