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 Ametek as such a stock due to the following factors:
- AME has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $43.5 million.
- AME has traded 1.4 million shares today.
- AME traded in a range 234.3% of the normal price range with a price range of $1.46.
- AME traded above its daily resistance level (quality: 6 days, meaning that the stock is crossing a resistance level set by the last 6 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 AME:
AMETEK, Inc. manufactures and sells electronic instruments and electromechanical devices in North America, Europe, Asia, and South America. The company operates in two segments, Electronic Instruments Group (EIG) and Electromechanical Group (EMG). The stock currently has a dividend yield of 0.7%. AME has a PE ratio of 22.8. Currently there are 5 analysts that rate Ametek a buy, no analysts rate it a sell, and 3 rate it a hold.
The average volume for Ametek has been 892,100 shares per day over the past 30 days. Ametek has a market cap of $12.6 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.45 and a short float of 0.5% with 1.32 days to cover. Shares are down 4% year-to-date as of the close of trading on Thursday.
rates Ametek as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, expanding profit margins and good cash flow from operations. We feel these 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 6.5%. Since the same quarter one year prior, revenues rose by 12.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- AMETEK INC has improved earnings per share by 17.3% 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, AMETEK INC increased its bottom line by earning $2.10 versus $1.89 in the prior year. This year, the market expects an improvement in earnings ($2.42 versus $2.10).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Electrical Equipment industry average. The net income increased by 16.9% when compared to the same quarter one year prior, going from $128.32 million to $150.06 million.
- 38.15% is the gross profit margin for AMETEK INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.14% is above that of the industry average.
- Net operating cash flow has increased to $155.08 million or 21.00% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 3.11%.
- You can view the full Ametek Ratings Report.