Watch Out: Barbarians At The Gate For ManpowerGroup (MAN)
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
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 ManpowerGroup as such a stock due to the following factors:
- MAN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $53.6 million.
- MAN has traded 553,297 shares today.
- MAN traded in a range 201.4% of the normal price range with a price range of $3.21.
- MAN traded above its daily resistance level (quality: 9 days, meaning that the stock is crossing a resistance level set by the last 9 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 MAN:
ManpowerGroup Inc. provides workforce solutions and services in the Americas, Southern Europe, Northern Europe, and the Asia Pacific Middle East region. The stock currently has a dividend yield of 1.2%. MAN has a PE ratio of 15.1. Currently there are 9 analysts that rate ManpowerGroup a buy, no analysts rate it a sell, and 3 rate it a hold.
The average volume for ManpowerGroup has been 812,200 shares per day over the past 30 days. ManpowerGroup has a market cap of $6.3 billion and is part of the services sector and diversified services industry. The stock has a beta of 1.90 and a short float of 1.2% with 1.41 days to cover. Shares are up 15.3% year-to-date as of the close of trading on Friday.
Analysis:
rates ManpowerGroup as a
. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, compelling growth in net income, impressive record of earnings per share growth and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- MAN's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.43, which illustrates the ability to avoid short-term cash problems.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Professional Services industry average. The net income increased by 15.8% when compared to the same quarter one year prior, going from $101.20 million to $117.20 million.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 4.4%. Since the same quarter one year prior, revenues slightly dropped by 2.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- MANPOWERGROUP has improved earnings per share by 17.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, MANPOWERGROUP increased its bottom line by earning $5.29 versus $3.61 in the prior year. For the next year, the market is expecting a contraction of 2.8% in earnings ($5.14 versus $5.29).
- You can view the full ManpowerGroup Ratings Report.
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