Trade-Ideas LLC identified

Global Payments

(

GPN

) 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 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 $95.5 million.
  • GPN has traded 945,418 shares today.
  • GPN traded in a range 248.4% of the normal price range with a price range of $2.99.
  • GPN traded above its daily resistance level (quality: 24 days, meaning that the stock is crossing a resistance level set by the last 24 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 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 28. Currently there are 10 analysts that rate Global Payments a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Global Payments has been 1.9 million shares per day over the past 30 days. Global Payments has a market cap of $7.8 billion and is part of the services sector and diversified services industry. The stock has a beta of 1.20 and a short float of 6.7% with 5.73 days to cover. Shares are down 6.8% year-to-date as of the close of trading on Monday.

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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, notable return on equity and solid stock price performance. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 18.3%. Since the same quarter one year prior, revenues slightly increased by 3.6%. 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 9.1% 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 ($2.94 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 5.3% when compared to the same quarter one year prior, going from $74.78 million to $78.77 million.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to other companies in the IT Services industry and the overall market on the basis of return on equity, GLOBAL PAYMENTS INC has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 30.08% over the past year, a rise that has exceeded that of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.

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