Trade-Ideas LLC identified

Pilgrims Pride

(

PPC

) 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 Pilgrims Pride as such a stock due to the following factors:

  • PPC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $35.7 million.
  • PPC has traded 716,852 shares today.
  • PPC traded in a range 235.2% of the normal price range with a price range of $1.60.
  • PPC traded above its daily resistance level (quality: 17 days, meaning that the stock is crossing a resistance level set by the last 17 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 PPC:

Pilgrim's Pride Corporation engages in the production, processing, marketing, and distribution of fresh, frozen, and value-added chicken products to retailers, distributors, and foodservice operators in the United States, Mexico, and Puerto Rico. PPC has a PE ratio of 7. Currently there are 2 analysts that rate Pilgrims Pride a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Pilgrims Pride has been 1.7 million shares per day over the past 30 days. Pilgrims Pride has a market cap of $4.9 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 0.47 and a short float of 62.7% with 23.30 days to cover. Shares are down 41.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Pilgrims Pride as a

buy

. The company's strengths can be seen in multiple areas, such as its notable return on equity, attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Food Products industry and the overall market, PILGRIM'S PRIDE CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • PILGRIM'S PRIDE CORP's earnings per share declined by 46.5% 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, PILGRIM'S PRIDE CORP increased its bottom line by earning $2.74 versus $2.12 in the prior year. This year, the market expects an improvement in earnings ($2.81 versus $2.74).
  • The debt-to-equity ratio is somewhat low, currently at 0.81, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.85 is somewhat weak and could be cause for future problems.
  • PPC, with its decline in revenue, underperformed when compared the industry average of 6.5%. Since the same quarter one year prior, revenues slightly dropped by 6.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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