Trade-Ideas LLC identified

Global Payments

(

GPN

) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Global Payments as such a stock due to the following factors:

  • GPN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $71.7 million.
  • GPN has traded 58,149 shares today.
  • GPN traded in a range 223.5% of the normal price range with a price range of $2.64.
  • GPN traded below its daily resistance level (quality: 14 days, meaning that the stock is crossing a resistance level set by the last 14 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on GPN:

Global Payments Inc. provides payment solutions for credit cards, debit cards, electronic payments, and check-related services. It operates in two segments, North America Merchant Services and International Merchant Services. The stock currently has a dividend yield of 0.1%. GPN has a PE ratio of 34. Currently there are 11 analysts that rate Global Payments a buy, 1 analyst rates it a sell, and 10 rate it a hold.

The average volume for Global Payments has been 1.3 million shares per day over the past 30 days. Global Payments has a market cap of $12.1 billion and is part of the services sector and diversified services industry. The stock has a beta of 1.21 and a short float of 2.7% with 3.71 days to cover. Shares are up 22.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Global Payments as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, good cash flow from operations and expanding profit margins. 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:

  • GPN's revenue growth has slightly outpaced the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 2.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • GLOBAL PAYMENTS INC has improved earnings per share by 14.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, GLOBAL PAYMENTS INC increased its bottom line by earning $2.06 versus $1.69 in the prior year. This year, the market expects an improvement in earnings ($2.98 versus $2.06).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the IT Services industry average. The net income increased by 10.4% when compared to the same quarter one year prior, going from $62.57 million to $69.06 million.
  • Net operating cash flow has significantly increased by 252.85% to $423.95 million when compared to the same quarter last year. In addition, GLOBAL PAYMENTS INC has also vastly surpassed the industry average cash flow growth rate of -23.35%.
  • The gross profit margin for GLOBAL PAYMENTS INC is rather high; currently it is at 67.71%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 10.15% trails the industry average.

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