Trade-Ideas LLC identified

Terex

(

TEX

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

  • TEX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $28.7 million.
  • TEX has traded 1.9 million shares today.
  • TEX traded in a range 209.8% of the normal price range with a price range of $2.12.
  • TEX traded above its daily resistance level (quality: 18 days, meaning that the stock is crossing a resistance level set by the last 18 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 TEX:

TheStreet Recommends

Terex Corporation operates as a lifting and material handling solutions company. The stock currently has a dividend yield of 1.6%. TEX has a PE ratio of 8. Currently there are 6 analysts that rate Terex a buy, 1 analyst rates it a sell, and 10 rate it a hold.

The average volume for Terex has been 1.3 million shares per day over the past 30 days. Terex has a market cap of $1.7 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 2.33 and a short float of 4.5% with 2.84 days to cover. Shares are down 18.8% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Terex as a

hold

. The company's strengths can be seen in multiple areas, such as its attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and deteriorating net income.

Highlights from the ratings report include:

  • Despite the weak revenue results, TEX has outperformed against the industry average of 21.7%. Since the same quarter one year prior, revenues slightly dropped by 9.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Even though the current debt-to-equity ratio is 1.00, it is still below the industry average, suggesting that this level of debt is acceptable within the Machinery industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.93 is weak.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Machinery industry and the overall market, TEREX CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Net operating cash flow has significantly decreased to $28.20 million or 69.38% 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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