Watch Out: Barbarians At The Gate For Visa (V)
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 Visa (V) 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 Visa as such a stock due to the following factors:
- V has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $566.0 million.
- V has traded 5.6 million shares today.
- V traded in a range 220.4% of the normal price range with a price range of $5.50.
- V 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 V with the Ticky from Trade-Ideas. See the FREE profile for V NOW at Trade-IdeasMore details on V: Visa Inc., a payments technology company, engages in the operation of retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. The stock currently has a dividend yield of 0.8%. V has a PE ratio of 26.6. Currently there are 15 analysts that rate Visa a buy, no analysts rate it a sell, and 8 rate it a hold.The average volume for Visa has been 3.0 million shares per day over the past 30 days. Visa has a market cap of $102.1 billion and is part of the financial sector and financial services industry. The stock has a beta of 0.40 and a short float of 2.2% with 4.55 days to cover. Shares are up 31.6% year-to-date as of the close of trading on Tuesday.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 Visa 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, expanding profit margins, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 22.7%. Since the same quarter one year prior, revenues slightly increased by 8.9%. 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.
- V has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, V has a quick ratio of 1.59, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for VISA INC is rather high; currently it is at 62.46%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 40.09% significantly outperformed against the industry average.
- Net operating cash flow has increased to $2,045.00 million or 49.37% when compared to the same quarter last year. In addition, VISA INC has also vastly surpassed the industry average cash flow growth rate of -14.31%.
- 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. Compared to other companies in the IT Services industry and the overall market on the basis of return on equity, VISA INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full Visa 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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