Barbarian At The Gate: Union Pacific (UNP)
Trade-Ideas LLC identified
(
) 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 Union Pacific as such a stock due to the following factors:
- UNP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $540.3 million.
- UNP has traded 3.9 million shares today.
- UNP traded in a range 212.2% of the normal price range with a price range of $4.55.
- UNP traded above its daily resistance level (quality: 4 days, meaning that the stock is crossing a resistance level set by the last 4 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 UNP:
Union Pacific Corporation, through its subsidiary, Union Pacific Railroad Company, operates railroads in the United States. The stock currently has a dividend yield of 2.5%. UNP has a PE ratio of 15. Currently there are 13 analysts that rate Union Pacific a buy, 1 analyst rates it a sell, and 4 rate it a hold.
The average volume for Union Pacific has been 5.5 million shares per day over the past 30 days. Union Pacific has a market cap of $74.5 billion and is part of the services sector and transportation industry. The stock has a beta of 0.75 and a short float of 1.6% with 2.34 days to cover. Shares are down 27.8% year-to-date as of the close of trading on Friday.
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Analysis:
rates Union Pacific as a
. The company's strengths can be seen in multiple areas, such as its notable return on equity, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- 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. When compared to other companies in the Road & Rail industry and the overall market, UNION PACIFIC CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- 48.81% is the gross profit margin for UNION PACIFIC CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 23.37% is above that of the industry average.
- The debt-to-equity ratio is somewhat low, currently at 0.65, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.74 is somewhat weak and could be cause for future problems.
- UNION PACIFIC CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, UNION PACIFIC CORP increased its bottom line by earning $5.76 versus $4.72 in the prior year. For the next year, the market is expecting a contraction of 1.9% in earnings ($5.65 versus $5.76).
- You can view the full Union Pacific Ratings Report.
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