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Trade-Ideas: Invesco (IVZ) Is Today's "Water-Logged And Getting Wetter" 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 Invesco ( IVZ) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Invesco as such a stock due to the following factors:

  • IVZ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $111.3 million.
  • IVZ has traded 1.9 million shares today.
  • IVZ traded in a range 253.4% of the normal price range with a price range of $1.71.
  • IVZ traded below its daily resistance level (quality: 5 days, meaning that the stock is crossing a resistance level set by the last 5 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in IVZ with the Ticky from Trade-Ideas. See the FREE profile for IVZ NOW at Trade-Ideas

More details on IVZ:

Invesco Ltd. is a publicly owned investment manager. It primarily provides its services to institutional clients including major public entities, corporations, unions, non-profit organizations, endowments, foundations, pension funds, and financial institutions. The stock currently has a dividend yield of 2.8%. IVZ has a PE ratio of 19.1. Currently there are 10 analysts that rate Invesco a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Invesco has been 3.2 million shares per day over the past 30 days. Invesco has a market cap of $14.3 billion and is part of the financial sector and financial services industry. The stock has a beta of 2.16 and a short float of 2.5% with 2.82 days to cover. Shares are up 23.4% year to date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Invesco as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, good cash flow from operations, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • IVZ's revenue growth has slightly outpaced the industry average of 12.1%. Since the same quarter one year prior, revenues rose by 15.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 39.39% and other important driving factors, this stock has surged by 35.84% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, IVZ should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has significantly increased by 82.54% to $740.20 million when compared to the same quarter last year. In addition, INVESCO LTD has also vastly surpassed the industry average cash flow growth rate of 5.52%.
  • INVESCO LTD has improved earnings per share by 39.4% 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, INVESCO LTD reported lower earnings of $1.48 versus $1.57 in the prior year. This year, the market expects an improvement in earnings ($2.07 versus $1.48).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Capital Markets industry average, but is greater than that of the S&P 500. The net income increased by 31.6% when compared to the same quarter one year prior, rising from $153.90 million to $202.60 million.

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