Watch Out: Barbarians At The Gate For KB Home (KBH)
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 KB Home (KBH) 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 KB Home as such a stock due to the following factors:
- KBH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $245.9 million.
- KBH has traded 1.3 million shares today.
- KBH traded in a range 7031.1% of the normal price range with a price range of $47.49.
- KBH traded above its daily resistance level (quality: 531 days, meaning that the stock is crossing a resistance level set by the last 531 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 KBH with the Ticky from Trade-Ideas. See the FREE profile for KBH NOW at Trade-IdeasMore details on KBH: KB Home operates as a homebuilding and financial services company in the United States. The company constructs and sells various homes, including attached and detached single-family residential homes, townhomes, and condominiums primarily for first-time, move-up, and active adult homebuyers. The stock currently has a dividend yield of 0.6%. KBH has a PE ratio of 70.7. Currently there are 4 analysts that rate KB Home a buy, 3 analysts rate it a sell, and 9 rate it a hold.The average volume for KB Home has been 4.8 million shares per day over the past 30 days. KB Home has a market cap of $1.4 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 2.53 and a short float of 39.5% with 5.46 days to cover. Shares are up 5.1% 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 KB Home as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and poor profit margins.Highlights from the ratings report include:
- KBH's revenue growth has slightly outpaced the industry average of 23.1%. Since the same quarter one year prior, revenues rose by 29.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- KB HOME reported significant earnings per share improvement 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. This trend suggests that the performance of the business is improving. During the past fiscal year, KB HOME continued to lose money by earning -$0.76 versus -$2.33 in the prior year. This year, the market expects an improvement in earnings ($0.61 versus -$0.76).
- Net operating cash flow has significantly decreased to -$133.86 million or 1050.63% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The debt-to-equity ratio is very high at 3.89 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
- You can view the full KB Home 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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