Watch Out: Barbarians At The Gate For Bank Of New York Mellon (BK)
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 Bank of New York Mellon (BK) 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 Bank of New York Mellon as such a stock due to the following factors:
- BK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $231.2 million.
- BK has traded 2.5 million shares today.
- BK traded in a range 208.5% of the normal price range with a price range of $1.08.
- BK traded above its daily resistance level (quality: 72 days, meaning that the stock is crossing a resistance level set by the last 72 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 BK with the Ticky from Trade-Ideas. See the FREE profile for BK NOW at Trade-IdeasMore details on BK: The Bank of New York Mellon Corporation provides various financial products and services in the United States and internationally. Its Investment Management segment provides institutional, intermediary, retirement and retail investment management, distribution, and related services. The stock currently has a dividend yield of 1.8%. BK has a PE ratio of 19.2. Currently there are 4 analysts that rate Bank of New York Mellon a buy, 2 analysts rate it a sell, and 7 rate it a hold.The average volume for Bank of New York Mellon has been 5.2 million shares per day over the past 30 days. Bank of New York Mellon has a market cap of $38.0 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.67 and a short float of 0.6% with 1.03 days to cover. Shares are down 4.2% 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 Bank of New York Mellon as a buy. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, expanding profit margins and increase in stock price during the past year. 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 gross profit margin for BANK OF NEW YORK MELLON CORP is currently very high, coming in at 97.53%. Regardless of BK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 14.65% trails the industry average.
- Despite the weak revenue results, BK has outperformed against the industry average of 16.6%. Since the same quarter one year prior, revenues slightly dropped by 1.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- BANK OF NEW YORK MELLON CORP's earnings per share declined by 17.0% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, BANK OF NEW YORK MELLON CORP reported lower earnings of $1.74 versus $2.05 in the prior year. This year, the market expects an improvement in earnings ($2.41 versus $1.74).
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full Bank of New York Mellon 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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