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Trade-Ideas: Lamar Advertising (LAMR) Is Today's "Barbarian At The Gate" 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 Lamar Advertising ( LAMR) 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 Lamar Advertising as such a stock due to the following factors:

  • LAMR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $93.2 million.
  • LAMR has traded 434,159 shares today.
  • LAMR traded in a range 258.6% of the normal price range with a price range of $2.82.
  • LAMR traded above its daily resistance level (quality: 532 days, meaning that the stock is crossing a resistance level set by the last 532 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 LAMR with the Ticky from Trade-Ideas. See the FREE profile for LAMR NOW at Trade-Ideas

More details on LAMR:

Lamar Advertising Company operates as an outdoor advertising company in the United States. LAMR has a PE ratio of 126.3. Currently there are 7 analysts that rate Lamar Advertising a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for Lamar Advertising has been 1.3 million shares per day over the past 30 days. Lamar Advertising has a market cap of $4.2 billion and is part of the services sector and media industry. Shares are down 0.4% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Lamar Advertising as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and increase in stock price during the past year. 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:

  • LAMR's revenue growth has slightly outpaced the industry average of 3.9%. Since the same quarter one year prior, revenues slightly increased by 4.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • LAMAR ADVERTISING CO has improved earnings per share by 37.5% 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, LAMAR ADVERTISING CO increased its bottom line by earning $0.41 versus $0.10 in the prior year. This year, the market expects an improvement in earnings ($1.01 versus $0.41).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Media industry average. The net income increased by 41.1% when compared to the same quarter one year prior, rising from $7.22 million to $10.19 million.
  • The gross profit margin for LAMAR ADVERTISING CO is rather high; currently it is at 66.50%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 3.17% trails the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Media industry and the overall market, LAMAR ADVERTISING CO's return on equity significantly trails that of both the industry average and the S&P 500.

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