Barbarian At The Gate: Sabre Corporation (SABR)

Trade-Ideas LLC identified Sabre Corporation (SABR) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Sabre Corporation

(

SABR

) 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 Sabre Corporation as such a stock due to the following factors:

  • SABR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $88.3 million.
  • SABR has traded 1.3 million shares today.
  • SABR traded in a range 213.7% of the normal price range with a price range of $1.45.
  • SABR traded above its daily resistance level (quality: 7 days, meaning that the stock is crossing a resistance level set by the last 7 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 SABR:

Sabre Corporation provides technology solutions to the travel and tourism industry worldwide. It operates in two segments: Travel Network, and Airline and Hospitality Solutions. The stock currently has a dividend yield of 1.3%. SABR has a PE ratio of 32. Currently there are 9 analysts that rate Sabre Corporation a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Sabre Corporation has been 1.8 million shares per day over the past 30 days. Sabre has a market cap of $7.8 billion and is part of the technology sector and computer software & services industry. Shares are up 42.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Sabre Corporation as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 27.0%. Since the same quarter one year prior, revenues rose by 16.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SABRE CORP 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, SABRE CORP turned its bottom line around by earning $0.40 versus -$0.04 in the prior year. This year, the market expects an improvement in earnings ($1.09 versus $0.40).
  • Powered by its strong earnings growth of 193.33% and other important driving factors, this stock has surged by 62.15% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the IT Services industry and the overall market, SABRE CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • The debt-to-equity ratio is very high at 6.81 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.48, which clearly demonstrates the inability to cover short-term cash needs.

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