Barbarian At The Gate: Valspar Corporation (VAL)
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 Valspar Corporation (VAL) 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 Valspar Corporation as such a stock due to the following factors:
- VAL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $37.5 million.
- VAL has traded 67,615 shares today.
- VAL traded in a range 231.3% of the normal price range with a price range of $2.29.
- VAL traded above its daily resistance level (quality: 168 days, meaning that the stock is crossing a resistance level set by the last 168 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 VAL with the Ticky from Trade-Ideas. See the FREE profile for VAL NOW at Trade-IdeasMore details on VAL: The Valspar Corporation manufactures and distributes various coatings, paints, and related products worldwide. The company operates in two segments, Coatings and Paints. The stock currently has a dividend yield of 1.3%. VAL has a PE ratio of 21.9. Currently there are 6 analysts that rate Valspar Corporation a buy, 1 analyst rates it a sell, and 3 rate it a hold.The average volume for Valspar Corporation has been 545,200 shares per day over the past 30 days. Valspar has a market cap of $6.2 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.10 and a short float of 1.8% with 3.15 days to cover. Shares are up 13.2% year to date as of the close of trading on Monday.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 Valspar Corporation as a buy. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, growth in earnings per share, revenue growth, notable return on equity and good cash flow from operations. 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:
- Compared to where it was 12 months ago, this stock has enjoyed a nice rise of 27.23% which was in line with the performance of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, VAL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- VALSPAR CORP has improved earnings per share by 13.0% 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, VALSPAR CORP turned its bottom line around by earning $3.09 versus -$1.56 in the prior year. This year, the market expects an improvement in earnings ($3.50 versus $3.09).
- Despite its growing revenue, the company underperformed as compared with the industry average of 7.3%. Since the same quarter one year prior, revenues slightly increased by 1.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Chemicals industry and the overall market, VALSPAR CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- Net operating cash flow has increased to $189.93 million or 15.61% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -7.07%.
- You can view the full Valspar Corporation 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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