Trade-Ideas LLC identified

Solera Holdings

(

SLH

) 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 Solera Holdings as such a stock due to the following factors:

  • SLH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $48.5 million.
  • SLH has traded 390,683 shares today.
  • SLH traded in a range 256.1% of the normal price range with a price range of $1.60.
  • SLH traded above its daily resistance level (quality: 5 days, meaning that the stock is crossing a resistance level set by the last 5 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 SLH:

TheStreet Recommends

Solera Holdings, Inc. provides risk and asset management software and services to the automotive and property marketplace. The stock currently has a dividend yield of 1.7%. Currently there is 1 analyst that rates Solera Holdings a buy, 2 analysts rate it a sell, and 5 rate it a hold.

The average volume for Solera Holdings has been 799,200 shares per day over the past 30 days. Solera has a market cap of $3.5 billion and is part of the technology sector and computer software & services industry. The stock has a beta of -0.07 and a short float of 2.5% with 1.88 days to cover. Shares are down 5.2% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Solera Holdings as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 16.5%. Since the same quarter one year prior, revenues rose by 11.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to where it was trading a year ago, SLH's share price has not changed very much due to (a) the relatively weak year-over-year performance of the overall market, (b) the company's stagnant earnings, and (c) other mixed results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The gross profit margin for SOLERA HOLDINGS INC is rather high; currently it is at 62.61%. Regardless of SLH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SLH's net profit margin of -21.34% significantly underperformed when compared to the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 640.8% when compared to the same quarter one year ago, falling from $12.36 million to -$66.87 million.
  • Net operating cash flow has significantly decreased to $17.35 million or 72.76% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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