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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.

Trade-Ideas LLC identified

Popular

(

BPOP

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

  • BPOP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $37.7 million.
  • BPOP has traded 655,338 shares today.
  • BPOP traded in a range 235.9% of the normal price range with a price range of $1.58.
  • BPOP traded above its daily resistance level (quality: 27 days, meaning that the stock is crossing a resistance level set by the last 27 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 BPOP:

TheStreet Recommends

Popular, Inc., through its subsidiaries, provides various retail and commercial banking products and services primarily to institutional and retail customers. The company accepts various deposit products. Currently there is 1 analyst that rates Popular a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Popular has been 1.2 million shares per day over the past 30 days. Popular has a market cap of $3.0 billion and is part of the financial sector and banking industry. The stock has a beta of 1.69 and a short float of 1.9% with 1.59 days to cover. Shares are down 13.3% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Popular as a

hold

. The company's strengths can be seen in multiple areas, such as its expanding profit margins and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:

  • The gross profit margin for POPULAR INC is currently very high, coming in at 82.80%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, BPOP's net profit margin of 14.80% significantly trails the industry average.
  • POPULAR INC has improved earnings per share by 10.9% 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, POPULAR INC swung to a loss, reporting -$1.88 versus $5.49 in the prior year. This year, the market expects an improvement in earnings ($3.33 versus -$1.88).
  • BPOP, with its decline in revenue, slightly underperformed the industry average of 2.8%. Since the same quarter one year prior, revenues slightly dropped by 1.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Commercial Banks industry and the overall market, POPULAR INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Commercial Banks industry average. The net income has decreased by 13.4% when compared to the same quarter one year ago, dropping from $86.41 million to $74.83 million.

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