Watch Out: Barbarians At The Gate For Amdocs (DOX)
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 Amdocs as such a stock due to the following factors:
- DOX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $44.1 million.
- DOX has traded 284,611 shares today.
- DOX traded in a range 284.2% of the normal price range with a price range of $2.98.
- DOX traded above its daily resistance level (quality: 23 days, meaning that the stock is crossing a resistance level set by the last 23 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 DOX:
Amdocs Limited, through its subsidiaries, provides software products and services for communications, entertainment, and media industry service providers worldwide. The stock currently has a dividend yield of 1.4%. DOX has a PE ratio of 2. Currently there are 3 analysts that rate Amdocs a buy, no analysts rate it a sell, and 4 rate it a hold.
The average volume for Amdocs has been 617,200 shares per day over the past 30 days. Amdocs has a market cap of $8.5 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.58 and a short float of 0.9% with 1.71 days to cover. Shares are up 5.8% year-to-date as of the close of trading on Thursday.
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Analysis:
rates Amdocs as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, solid stock price performance and expanding profit margins. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 7.5%. Since the same quarter one year prior, revenues slightly increased by 2.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- AMDOCS' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, AMDOCS increased its bottom line by earning $2.85 versus $2.62 in the prior year. This year, the market expects an improvement in earnings ($3.57 versus $2.85).
- After a year of stock price fluctuations, the net result is that DOX's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- 37.95% is the gross profit margin for AMDOCS which we consider to be strong. Regardless of DOX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 11.63% trails the industry average.
- You can view the full Amdocs Ratings Report.
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