Watch Out: Barbarians At The Gate For CA (CA)
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 CA as such a stock due to the following factors:
- CA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $75.2 million.
- CA has traded 2.1 million shares today.
- CA traded in a range 239% of the normal price range with a price range of $1.16.
- CA traded above its daily resistance level (quality: 25 days, meaning that the stock is crossing a resistance level set by the last 25 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 CA:
CA, Inc. provides information technology (IT) management software and solutions that help organizations plan, develop, manage, and secure applications and IT infrastructure in the United States and internationally. The stock currently has a dividend yield of 3.7%. CA has a PE ratio of 16. Currently there are 2 analysts that rate CA a buy, 1 analyst rates it a sell, and 5 rate it a hold.
The average volume for CA has been 3.0 million shares per day over the past 30 days. CA has a market cap of $11.8 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.83 and a short float of 5.3% with 6.28 days to cover. Shares are down 11.7% year-to-date as of the close of trading on Tuesday.
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Analysis:
rates CA as a
. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- The gross profit margin for CA INC is currently very high, coming in at 85.27%. 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 17.31% trails the industry average.
- Despite the weak revenue results, CA has outperformed against the industry average of 17.3%. Since the same quarter one year prior, revenues slightly dropped by 6.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Net operating cash flow has decreased to $45.00 million or 31.81% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Software industry average. The net income has significantly decreased by 32.0% when compared to the same quarter one year ago, falling from $256.00 million to $174.00 million.
- You can view the full CA Ratings Report.
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