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 "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Baker Hughes as such a stock due to the following factors:
- BHI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $1.4 billion.
- BHI has traded 2.6 million shares today.
- BHI is trading at 1.91 times the normal volume for the stock at this time of day.
- BHI crossed above its 200-day simple moving average.
'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in BHI with the Ticky from Trade-Ideas. See the FREE profile for BHI NOW at Trade-Ideas
More details on BHI:
Baker Hughes Incorporated supplies oilfield services, products, technology, and systems to the oil and natural gas industry worldwide. The stock currently has a dividend yield of 1.1%. BHI has a PE ratio of 21.5. Currently there are 15 analysts that rate Baker Hughes a buy, no analysts rate it a sell, and 7 rate it a hold.
The average volume for Baker Hughes has been 7.5 million shares per day over the past 30 days. Baker Hughes has a market cap of $27.5 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.83 and a short float of 1.9% with 0.40 days to cover. Shares are up 16.6% year-to-date as of the close of trading on Thursday.
rates Baker Hughes as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, increase in net income and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 15.4%. Since the same quarter one year prior, revenues slightly increased by 8.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- BHI's debt-to-equity ratio is very low at 0.24 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 1.36, which illustrates the ability to avoid short-term cash problems.
- BAKER HUGHES INC has improved earnings per share by 11.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BAKER HUGHES INC reported lower earnings of $2.47 versus $2.98 in the prior year. This year, the market expects an improvement in earnings ($3.97 versus $2.47).
- 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 Energy Equipment & Services industry average. The net income increased by 10.0% when compared to the same quarter one year prior, going from $341.00 million to $375.00 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. In comparison to the other companies in the Energy Equipment & Services industry and the overall market, BAKER HUGHES INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full Baker Hughes Ratings Report.