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 or Stephanie Link.
Trade-Ideas LLC identified
) 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 CommScope as such a stock due to the following factors:
- COMM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $27.7 million.
- COMM has traded 2.4 million shares today.
- COMM traded in a range 242.5% of the normal price range with a price range of $1.86.
- COMM traded above its daily resistance level (quality: 122 days, meaning that the stock is crossing a resistance level set by the last 122 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 COMM:
CommScope Holding Company, Inc., together with its subsidiaries, provides connectivity and infrastructure solutions for wireless, business enterprise, and residential broadband networks worldwide. The company operates through three segments: Wireless, Enterprise, and Broadband. COMM has a PE ratio of 23.3. Currently there are 7 analysts that rate CommScope a buy, 1 analyst rates it a sell, and none rate it a hold.
The average volume for CommScope has been 1.2 million shares per day over the past 30 days. CommScope has a market cap of $4.1 billion and is part of the technology sector and telecommunications industry. Shares are down 5.3% year-to-date as of the close of trading on Monday.
rates CommScope as a
. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and notable return on equity. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.
Highlights from the ratings report include:
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust.
- The revenue growth came in higher than the industry average of 5.7%. Since the same quarter one year prior, revenues rose by 12.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 37.79% is the gross profit margin for COMMSCOPE HOLDING CO INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, COMM's net profit margin of 9.63% significantly trails the industry average.
- The debt-to-equity ratio is very high at 2.10 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, COMM has managed to keep a strong quick ratio of 2.31, which demonstrates the ability to cover short-term cash needs.
- You can view the full CommScope Ratings Report.