Trade-Ideas: Blackstone Group (BX) Is Today's "Storm The Castle" Stock
Trade-Ideas LLC identified
(
) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Blackstone Group as such a stock due to the following factors:
- BX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $133.9 million.
- BX has traded 2.0 million shares today.
- BX is trading at 1.93 times the normal volume for the stock at this time of day.
- BX crossed above its 200-day simple moving average.
'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.
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More details on BX:
The Blackstone Group L.P. is a publicly owned investment manager. The firm also provides financial advisory services to its clients. It provides its services to public and corporate pension funds, academic, cultural, and charitable organizations. The stock currently has a dividend yield of 6.5%. BX has a PE ratio of 16. Currently there are 7 analysts that rate Blackstone Group a buy, no analysts rate it a sell, and 4 rate it a hold.
The average volume for Blackstone Group has been 4.3 million shares per day over the past 30 days. Blackstone Group has a market cap of $32.0 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.27 and a short float of 2% with 2.69 days to cover. Shares are down 6.2% year-to-date as of the close of trading on Friday.
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Analysis:
rates Blackstone Group as a
. The company's strengths can be seen in multiple areas, such as its increase in net income, expanding profit margins and growth in earnings per share. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.
Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 48.0% when compared to the same quarter one year prior, rising from $134.17 million to $198.63 million.
- 43.33% is the gross profit margin for BLACKSTONE GROUP LP which we consider to be strong. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 16.65% trails the industry average.
- BLACKSTONE GROUP LP has improved earnings per share by 42.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BLACKSTONE GROUP LP reported lower earnings of $1.04 versus $2.59 in the prior year. This year, the market expects an improvement in earnings ($2.17 versus $1.04).
- Despite the weak revenue results, BX has outperformed against the industry average of 13.7%. Since the same quarter one year prior, revenues slightly dropped by 2.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- BX's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 34.66%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- You can view the full Blackstone Group Ratings Report.
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