Trade-Ideas LLC identified

ConAgra Foods

(

CAG

) 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 ConAgra Foods as such a stock due to the following factors:

  • CAG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $188.5 million.
  • CAG has traded 1.7 million shares today.
  • CAG traded in a range 235% of the normal price range with a price range of $1.60.
  • CAG traded above its daily resistance level (quality: 6 days, meaning that the stock is crossing a resistance level set by the last 6 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 CAG:

ConAgra Foods, Inc. operates as a food company primarily in North America. The company operates through three segments: Consumer Foods, Commercial Foods, and Private Brands. The stock currently has a dividend yield of 2.1%. Currently there are 5 analysts that rate ConAgra Foods a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for ConAgra Foods has been 2.6 million shares per day over the past 30 days. ConAgra has a market cap of $20.6 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 0.25 and a short float of 1.1% with 1.07 days to cover. Shares are up 12.9% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates ConAgra Foods as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, good cash flow from operations, solid stock price performance and compelling growth in net income. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • CAG's revenue growth trails the industry average of 16.6%. Since the same quarter one year prior, revenues slightly increased by 0.6%. 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.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Food Products industry and the overall market, CONAGRA FOODS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $377.10 million or 16.82% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 3.11%.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • CONAGRA FOODS INC's earnings per share declined by 16.3% 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, CONAGRA FOODS INC increased its bottom line by earning $1.74 versus $0.35 in the prior year. This year, the market expects an improvement in earnings ($2.07 versus $1.74).

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