Copa Holdings (CPA) 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 Copa Holdings (CPA) 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 Copa Holdings as such a stock due to the following factors:
- CPA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $73.1 million.
- CPA has traded 454,313 shares today.
- CPA is trading at 10.76 times the normal volume for the stock at this time of day.
- CPA 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 CPA with the Ticky from Trade-Ideas. See the FREE profile for CPA NOW at Trade-IdeasMore details on CPA: Copa Holdings, S.A. provides airline passenger and cargo services in Latin America. It provides services within Colombia; and international flights from various cities in Colombia to Panama, Venezuela, Ecuador, Mexico, Cuba, Guatemala, and Costa Rica. The stock currently has a dividend yield of 2.2%. CPA has a PE ratio of 17.1. Currently there are 8 analysts that rate Copa Holdings a buy, 1 analyst rates it a sell, and none rate it a hold.The average volume for Copa Holdings has been 413,900 shares per day over the past 30 days. Copa has a market cap of $4.4 billion and is part of the services sector and transportation industry. Shares are down 16.2% year-to-date as of the close of trading on Wednesday.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 Copa Holdings 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, largely solid financial position with reasonable debt levels by most measures and increase in net income. We feel these strengths outweigh the fact that the company shows low profit margins.Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 22.6%. Since the same quarter one year prior, revenues rose by 14.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.61, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.15, which illustrates the ability to avoid short-term cash problems.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- COPA HOLDINGS SA has improved earnings per share by 12.7% 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, COPA HOLDINGS SA increased its bottom line by earning $7.35 versus $7.02 in the prior year. This year, the market expects an improvement in earnings ($9.77 versus $7.35).
- The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Airlines industry average. The net income increased by 12.6% when compared to the same quarter one year prior, going from $111.92 million to $126.01 million.
- You can view the full Copa Holdings 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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