Trade-Ideas: ARRIS Group (ARRS) Is Today's "Barbarian At The Gate" Stock
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 ARRIS Group as such a stock due to the following factors:
- ARRS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $32.2 million.
- ARRS has traded 594,349 shares today.
- ARRS traded in a range 218.4% of the normal price range with a price range of $1.68.
- ARRS traded above its daily resistance level (quality: 21 days, meaning that the stock is crossing a resistance level set by the last 21 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 ARRS:
ARRIS Group, Inc. provides media entertainment and data communications solutions in the United States and internationally. The company operates in two segments, Customer Premises Equipment and Network & Cloud. ARRS has a PE ratio of 17. Currently there are 6 analysts that rate ARRIS Group a buy, no analysts rate it a sell, and none rate it a hold.
The average volume for ARRIS Group has been 1.4 million shares per day over the past 30 days. ARRIS Group has a market cap of $4.2 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 1.39 and a short float of 10.6% with 13.90 days to cover. Shares are down 3.7% year-to-date as of the close of trading on Wednesday.
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Analysis:
rates ARRIS Group as a
. The company's strengths can be seen in multiple areas, such as its notable return on equity, reasonable valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Communications Equipment industry and the overall market, ARRIS GROUP INC's return on equity exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has significantly increased by 159.65% to $212.75 million when compared to the same quarter last year. In addition, ARRIS GROUP INC has also vastly surpassed the industry average cash flow growth rate of 4.05%.
- ARRS, with its decline in revenue, slightly underperformed the industry average of 9.1%. Since the same quarter one year prior, revenues fell by 13.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- ARRS's debt-to-equity ratio of 0.90 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.41 is sturdy.
- You can view the full ARRIS Group Ratings Report.
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