Watch Out: Barbarians At The Gate For Tenneco (TEN)

Trade-Ideas LLC identified Tenneco (TEN) 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

Tenneco

(

TEN

) 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 Tenneco as such a stock due to the following factors:

  • TEN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.9 million.
  • TEN has traded 247,121 shares today.
  • TEN traded in a range 294.7% of the normal price range with a price range of $5.68.
  • TEN traded above its daily resistance level (quality: 3 days, meaning that the stock is crossing a resistance level set by the last 3 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 TEN:

Tenneco Inc. designs, manufactures, and sells clean air and ride performance products and systems for light vehicle, commercial truck, off-highway, and other vehicle applications worldwide. TEN has a PE ratio of 12. Currently there are 5 analysts that rate Tenneco a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for Tenneco has been 566,200 shares per day over the past 30 days. Tenneco has a market cap of $2.9 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 1.99 and a short float of 5.1% with 4.82 days to cover. Shares are up 9% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Tenneco as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, impressive record of earnings per share growth, increase in net income and good cash flow from operations. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • TEN's revenue growth has slightly outpaced the industry average of 0.0%. Since the same quarter one year prior, revenues slightly increased by 5.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • TENNECO INC has improved earnings per share by 23.8% 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. We feel that this trend should continue. During the past fiscal year, TENNECO INC increased its bottom line by earning $4.11 versus $3.67 in the prior year. This year, the market expects an improvement in earnings ($5.64 versus $4.11).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Auto Components industry average. The net income increased by 16.3% when compared to the same quarter one year prior, going from $49.00 million to $57.00 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Auto Components industry and the overall market, TENNECO INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to -$29.00 million or 42.00% when compared to the same quarter last year. Despite an increase in cash flow, TENNECO INC's cash flow growth rate is still lower than the industry average growth rate of 85.40%.

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