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Trade-Ideas: DCT Industrial (DCT) 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 DCT Industrial ( DCT) 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 DCT Industrial as such a stock due to the following factors:

  • DCT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $34.9 million.
  • DCT has traded 671,753 shares today.
  • DCT traded in a range 207% of the normal price range with a price range of $0.19.
  • DCT traded above its daily resistance level (quality: 2 days, meaning that the stock is crossing a resistance level set by the last 2 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.

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More details on DCT:

DCT Industrial Trust Inc. operates as a publicly owned real estate investment trust. The firm provides its services to companies. Through its fund, it engages in the ownership, operation, and development of real estate properties. The stock currently has a dividend yield of 3.5%. Currently there are 2 analysts that rate DCT Industrial a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for DCT Industrial has been 6.5 million shares per day over the past 30 days. DCT Industrial has a market cap of $2.7 billion and is part of the financial sector and real estate industry. The stock has a beta of 1.18 and a short float of 3.3% with 2.41 days to cover. Shares are up 13.3% 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 DCT Industrial as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and poor profit margins.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 10.3%. Since the same quarter one year prior, revenues rose by 26.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • DCT INDUSTRIAL TRUST INC reported significant earnings per share improvement 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. This trend suggests that the performance of the business is improving. During the past fiscal year, DCT INDUSTRIAL TRUST INC continued to lose money by earning -$0.03 versus -$0.10 in the prior year. This year, the market expects an improvement in earnings ($0.06 versus -$0.03).
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The gross profit margin for DCT INDUSTRIAL TRUST INC is rather low; currently it is at 15.86%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.36% significantly trails the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 75.2% when compared to the same quarter one year ago, falling from $1.28 million to $0.32 million.

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