Barbarian At The Gate: SodaStream International (SODA)
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 SodaStream International (SODA) 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 SodaStream International as such a stock due to the following factors:
- SODA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $34.1 million.
- SODA has traded 991,624 shares today.
- SODA traded in a range 248.5% of the normal price range with a price range of $4.65.
- SODA traded above 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 '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 SODA with the Ticky from Trade-Ideas. See the FREE profile for SODA NOW at Trade-IdeasMore details on SODA: SodaStream International Ltd. engages in the development, manufacture, and sale of home beverage carbonation systems that enable consumers to transform ordinary tap water instantly into carbonated soft drinks and sparkling water. SODA has a PE ratio of 22.5. Currently there are 2 analysts that rate SodaStream International a buy, 1 analyst rates it a sell, and 6 rate it a hold.The average volume for SodaStream International has been 818,500 shares per day over the past 30 days. SodaStream International has a market cap of $1.2 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 1.11 and a short float of 53.6% with 15.03 days to cover. Shares are up 18.8% 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 SodaStream International as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 28.8%. Since the same quarter one year prior, revenues rose by 28.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- SODA's debt-to-equity ratio is very low at 0.06 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.02, which illustrates the ability to avoid short-term cash problems.
- SODASTREAM INTERNATIONAL LTD' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, SODASTREAM INTERNATIONAL LTD increased its bottom line by earning $2.09 versus $1.34 in the prior year. This year, the market expects an improvement in earnings ($2.59 versus $2.09).
- Compared to its closing price of one year ago, SODA's share price has jumped by 37.54%, exceeding the performance of the broader market during that same time frame. 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.
- Net operating cash flow has increased to $4.95 million or 13.75% when compared to the same quarter last year. Despite an increase in cash flow of 13.75%, SODASTREAM INTERNATIONAL LTD is still growing at a significantly lower rate than the industry average of 86.38%.
- You can view the full SodaStream International 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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