Buy a Washington Federal (WAFD) Stock Dip to $25

The longer-term view of Washington Federal (WAFD) shows a breakout over $24.
By Bruce Kamich ,

NEW YORK (TheStreet) -- Washington Federal (WAFD) - Get Report has moved higher this year with only a shallow pullback over the summer to the rising 200-day moving average. See the chart below.

The longer-term view of WAFD, above, shows a breakout over $24 with a rising 40-week moving average. The Moving Average Convergence Divergence (MACD) oscillator is in gear with the rally, but the OBV isn't quiet there. Traders should look to buy a dip to $25, if available, and then risk a close below $24.

TheStreet Ratings team rates WASHINGTON FEDERAL INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

We rate WASHINGTON FEDERAL INC (WAFD) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, attractive valuation levels, expanding profit margins and growth in earnings per share. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 12.8%. Since the same quarter one year prior, revenues slightly increased by 4.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The gross profit margin for WASHINGTON FEDERAL INC is currently very high, coming in at 81.12%. 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 27.94% trails the industry average.
  • WASHINGTON FEDERAL INC has improved earnings per share by 9.8% 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, WASHINGTON FEDERAL INC increased its bottom line by earning $1.67 versus $1.55 in the prior year. This year, the market expects earnings to be in line with last year ($1.67 versus $1.67).
  • You can view the full analysis from the report here: WAFD

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

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