Trade-Ideas LLC identified

Dr Pepper Snapple Group

(

DPS

) 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 Dr Pepper Snapple Group as such a stock due to the following factors:

  • DPS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $94.9 million.
  • DPS has traded 1.2 million shares today.
  • DPS traded in a range 202.2% of the normal price range with a price range of $2.51.
  • DPS traded above its daily resistance level (quality: 41 days, meaning that the stock is crossing a resistance level set by the last 41 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 DPS:

Dr Pepper Snapple Group, Inc. operates as a brand owner, manufacturer, and distributor of non-alcoholic beverages in the United States, Mexico, and Canada. The company operates through three segments: Beverage Concentrates, Packaged Beverages, and Latin America Beverages. The stock currently has a dividend yield of 2.3%. DPS has a PE ratio of 22. Currently there are 3 analysts that rate Dr Pepper Snapple Group a buy, 1 analyst rates it a sell, and 9 rate it a hold.

The average volume for Dr Pepper Snapple Group has been 1.2 million shares per day over the past 30 days. Dr Pepper Snapple Group has a market cap of $17.2 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 0.64 and a short float of 4.2% with 7.66 days to cover. Shares are down 1.1% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Dr Pepper Snapple Group as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and solid stock price performance. 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:

  • The revenue growth came in higher than the industry average of 7.6%. Since the same quarter one year prior, revenues slightly increased by 2.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • DR PEPPER SNAPPLE GROUP INC has improved earnings per share by 18.5% 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, DR PEPPER SNAPPLE GROUP INC increased its bottom line by earning $3.97 versus $3.57 in the prior year. This year, the market expects an improvement in earnings ($4.34 versus $3.97).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Beverages industry. The net income increased by 15.9% when compared to the same quarter one year prior, going from $157.00 million to $182.00 million.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Beverages industry and the overall market, DR PEPPER SNAPPLE GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.

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