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Trade-Ideas: Cameron International Corporation (CAM) Is Today's "Storm The Castle" 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 Cameron International Corporation ( CAM) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Cameron International Corporation as such a stock due to the following factors:

  • CAM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $203.1 million.
  • CAM has traded 215,939 shares today.
  • CAM is trading at 2.16 times the normal volume for the stock at this time of day.
  • CAM crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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

More details on CAM:

Cameron International Corporation provides flow equipment products, systems, and services worldwide. CAM has a PE ratio of 20.9. Currently there are 9 analysts that rate Cameron International Corporation a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Cameron International Corporation has been 4.0 million shares per day over the past 30 days. Cameron International has a market cap of $14.0 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.24 and a short float of 2.9% with 2.09 days to cover. Shares are down 1.4% 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 Cameron International Corporation as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • CAM's revenue growth has slightly outpaced the industry average of 9.1%. Since the same quarter one year prior, revenues rose by 12.5%. 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.
  • Net operating cash flow has increased to $199.60 million or 11.82% when compared to the same quarter last year. Despite an increase in cash flow, CAMERON INTERNATIONAL CORP's cash flow growth rate is still lower than the industry average growth rate of 30.43%.
  • CAMERON INTERNATIONAL CORP's earnings per share declined by 13.3% 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, CAMERON INTERNATIONAL CORP increased its bottom line by earning $3.02 versus $2.09 in the prior year. This year, the market expects an improvement in earnings ($3.25 versus $3.02).
  • Despite currently having a low debt-to-equity ratio of 0.32, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.08 is sturdy.

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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