Barbarian At The Gate: Veeva Systems (VEEV) - TheStreet

Trade-Ideas LLC identified

Veeva Systems

(

VEEV

) 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 Veeva Systems as such a stock due to the following factors:

  • VEEV has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $20.7 million.
  • VEEV has traded 223,812 shares today.
  • VEEV traded in a range 220.1% of the normal price range with a price range of $1.38.
  • VEEV traded above its daily resistance level (quality: 266 days, meaning that the stock is crossing a resistance level set by the last 266 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 VEEV:

Veeva Systems Inc. provides cloud-based software solutions for the life sciences industry in North America, Europe, the Asia Pacific, and Latin America. VEEV has a PE ratio of 8. Currently there are 7 analysts that rate Veeva Systems a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Veeva Systems has been 904,700 shares per day over the past 30 days. Veeva Systems has a market cap of $2.1 billion and is part of the technology sector and computer software & services industry. Shares are up 3.1% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Veeva Systems as a

sell

. Among the areas we feel are negative, one of the most important has been weak operating cash flow.

Highlights from the ratings report include:

  • Net operating cash flow has declined marginally to $15.18 million or 8.58% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • After a year of stock price fluctuations, the net result is that VEEV's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Health Care Technology industry and the overall market on the basis of return on equity, VEEVA SYSTEMS INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The gross profit margin for VEEVA SYSTEMS INC is rather high; currently it is at 67.25%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 13.66% is above that of the industry average.
  • VEEV has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.76, which clearly demonstrates the ability to cover short-term cash needs.

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