Trade-Ideas LLC identified

Harris Corporation

(

HRS

) 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 Harris Corporation as such a stock due to the following factors:

  • HRS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $52.8 million.
  • HRS has traded 206,748 shares today.
  • HRS is trading at 1.70 times the normal volume for the stock at this time of day.
  • HRS 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.

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More details on HRS:

TST Recommends

Harris Corporation provides technology-based solutions that solve government and commercial customers' mission-critical challenges. The company operates in four segments: Communication Systems, Critical Networks, Electronic Systems, and Space and Intelligence Systems. The stock currently has a dividend yield of 2.6%. HRS has a PE ratio of 24. Currently there are 6 analysts that rate Harris Corporation a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Harris Corporation has been 927,700 shares per day over the past 30 days. Harris has a market cap of $9.4 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 1.47 and a short float of 1.3% with 2.39 days to cover. Shares are up 4.3% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Harris Corporation as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 10.4%. Since the same quarter one year prior, revenues rose by 15.4%. 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.
  • Net operating cash flow has increased to $458.80 million or 16.09% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -11.87%.
  • 35.34% is the gross profit margin for HARRIS CORP which we consider to be strong. 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 -3.66% is in-line with the industry average.
  • HARRIS CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, HARRIS CORP reported lower earnings of $3.19 versus $5.00 in the prior year. This year, the market expects an improvement in earnings ($5.72 versus $3.19).
  • 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. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

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