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 "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Computer as such a stock due to the following factors:
- CSC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $68.4 million.
- CSC has traded 1.9 million shares today.
- CSC is trading at 2.90 times the normal volume for the stock at this time of day.
- CSC crossed above its 200-day simple moving average.
'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in CSC with the Ticky from Trade-Ideas. See the FREE profile for CSC NOW at Trade-Ideas
More details on CSC:
Computer Sciences Corporation provides information technology (IT) and professional services and solutions in North America, Europe, Asia, and Australia. The company operates through Global Business Services, Global Infrastructure Services, and North American Public Sector segments. The stock currently has a dividend yield of 1.6%. CSC has a PE ratio of 14.1. Currently there is 1 analyst that rates Computer a buy, 1 analyst rates it a sell, and 8 rate it a hold.
The average volume for Computer has been 936,400 shares per day over the past 30 days. Computer has a market cap of $8.2 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.09 and a short float of 4.7% with 5.75 days to cover. Shares are up 1.3% year-to-date as of the close of trading on Friday.
rates Computer as a
. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- The debt-to-equity ratio is somewhat low, currently at 0.72, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, CSC has a quick ratio of 1.52, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has increased to $273.00 million or 28.16% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -1.83%.
- COMPUTER SCIENCES CORP reported flat earnings per share in the most recent quarter. 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, COMPUTER SCIENCES CORP increased its bottom line by earning $4.13 versus $3.07 in the prior year. This year, the market expects an improvement in earnings ($4.53 versus $4.13).
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- You can view the full Computer Ratings Report.