Barbarian At The Gate: Asbury Automotive Group (ABG)
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 Asbury Automotive Group (ABG) 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 Asbury Automotive Group as such a stock due to the following factors:
- ABG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $20.9 million.
- ABG has traded 74,423 shares today.
- ABG traded in a range 244% of the normal price range with a price range of $3.86.
- ABG traded above its daily resistance level (quality: 20 days, meaning that the stock is crossing a resistance level set by the last 20 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 ABG with the Ticky from Trade-Ideas. See the FREE profile for ABG NOW at Trade-IdeasMore details on ABG: Asbury Automotive Group, Inc. operates as an automotive retailer in the United States. It offers a range of automotive products and services, including new and used vehicles; vehicle maintenance, replacement parts, and collision repair services; and financing, insurance, and service contracts. ABG has a PE ratio of 15.2. Currently there are 5 analysts that rate Asbury Automotive Group a buy, 1 analyst rates it a sell, and 3 rate it a hold.The average volume for Asbury Automotive Group has been 264,100 shares per day over the past 30 days. Asbury Automotive Group has a market cap of $1.5 billion and is part of the services sector and specialty retail industry. The stock has a beta of 1.05 and a short float of 4.6% with 2.75 days to cover. Shares are down 15.5% 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 Asbury Automotive Group as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, reasonable valuation levels, good cash flow from operations and growth in earnings per share. 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:
- ABG's revenue growth has slightly outpaced the industry average of 7.3%. Since the same quarter one year prior, revenues rose by 16.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 39.06% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ABG should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Net operating cash flow has increased to $50.30 million or 45.79% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 3.31%.
- ASBURY AUTOMOTIVE GROUP INC's earnings per share improvement from the most recent quarter was slightly positive. 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, ASBURY AUTOMOTIVE GROUP INC increased its bottom line by earning $2.64 versus $1.42 in the prior year. This year, the market expects an improvement in earnings ($3.47 versus $2.64).
- You can view the full Asbury Automotive Group 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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