Watch Out: Barbarians At The Gate For Iron Mountain (IRM)

Trade-Ideas LLC identified Iron Mountain (IRM) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Iron Mountain

(

IRM

) 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 Iron Mountain as such a stock due to the following factors:

  • IRM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $83.8 million.
  • IRM has traded 996,528 shares today.
  • IRM traded in a range 232.2% of the normal price range with a price range of $1.47.
  • IRM 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 IRM:

Iron Mountain Incorporated, a real estate investment trust, provides storage and information management services in North America, Europe, Latin America, and the Asia Pacific. The stock currently has a dividend yield of 6.3%. IRM has a PE ratio of 11. Currently there are 3 analysts that rate Iron Mountain a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Iron Mountain has been 1.7 million shares per day over the past 30 days. Iron Mountain has a market cap of $6.4 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.07 and a short float of 7.6% with 4.55 days to cover. Shares are down 20.7% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Iron Mountain as a

hold

. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • Net operating cash flow has increased to $174.23 million or 24.48% when compared to the same quarter last year. In addition, IRON MOUNTAIN INC has also vastly surpassed the industry average cash flow growth rate of -72.17%.
  • The gross profit margin for IRON MOUNTAIN INC is rather high; currently it is at 57.05%. Regardless of IRM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, IRM's net profit margin of 7.01% is significantly lower than the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 80.4% when compared to the same quarter one year ago, falling from $271.64 million to $53.33 million.
  • The share price of IRON MOUNTAIN INC has not done very well: it is down 14.99% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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