Roof Leaker To Watch: Manhattan Associates (MANH)
Trade-Ideas LLC identified
(
) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Manhattan Associates as such a stock due to the following factors:
- MANH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $54.5 million.
- MANH has traded 391,440 shares today.
- MANH is trading at 1.89 times the normal volume for the stock at this time of day.
- MANH crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.
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More details on MANH:
Manhattan Associates, Inc. develops, sells, deploys, services, and maintains software solutions to manage supply chains, inventory, and omni-channel operations for retailers, wholesalers, manufacturers, logistics providers, and other organizations. MANH has a PE ratio of 45. Currently there are 2 analysts that rate Manhattan Associates a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for Manhattan Associates has been 753,200 shares per day over the past 30 days. Manhattan Associates has a market cap of $4.9 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.26 and a short float of 6.7% with 3.65 days to cover. Shares are down 3.6% year-to-date as of the close of trading on Tuesday.
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Analysis:
rates Manhattan Associates as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, solid stock price performance and impressive record of earnings per share growth. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
Highlights from the ratings report include:
- MANH's revenue growth has slightly outpaced the industry average of 8.4%. Since the same quarter one year prior, revenues rose by 12.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- MANH has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, MANH has a quick ratio of 1.67, which demonstrates the ability of the company to cover short-term liquidity needs.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Software industry and the overall market, MANHATTAN ASSOCIATES INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- 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.
- MANHATTAN ASSOCIATES INC has improved earnings per share by 22.6% 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, MANHATTAN ASSOCIATES INC increased its bottom line by earning $1.40 versus $1.08 in the prior year. This year, the market expects an improvement in earnings ($1.75 versus $1.40).
- You can view the full Manhattan Associates Ratings Report.
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