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 "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 Heartland Payment Systems as such a stock due to the following factors:
- HPY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $27.8 million.
- HPY has traded 210,349 shares today.
- HPY traded in a range 212.1% of the normal price range with a price range of $1.90.
- HPY traded above its daily resistance level (quality: 197 days, meaning that the stock is crossing a resistance level set by the last 197 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 HPY:
Heartland Payment Systems, Inc. provides card payment processing services in the United States. The stock currently has a dividend yield of 0.8%. HPY has a PE ratio of 23.1. Currently there are 6 analysts that rate Heartland Payment Systems a buy, no analysts rate it a sell, and 8 rate it a hold.
The average volume for Heartland Payment Systems has been 382,400 shares per day over the past 30 days. Heartland Payment Systems has a market cap of $1.6 billion and is part of the services sector and diversified services industry. The stock has a beta of 0.82 and a short float of 37.2% with 13.24 days to cover. Shares are down 8.9% year-to-date as of the close of trading on Tuesday.
rates Heartland Payment Systems as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, growth in earnings per share, increase in stock price during the past year and largely solid financial position with reasonable debt levels by most measures. 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 revenue growth came in higher than the industry average of 12.2%. Since the same quarter one year prior, revenues slightly increased by 4.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Net operating cash flow has significantly increased by 984.06% to $15.21 million when compared to the same quarter last year. In addition, HEARTLAND PAYMENT SYSTEMS has also vastly surpassed the industry average cash flow growth rate of -3.20%.
- HEARTLAND PAYMENT SYSTEMS's earnings per share improvement from the most recent quarter was slightly positive. 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, HEARTLAND PAYMENT SYSTEMS increased its bottom line by earning $1.98 versus $1.61 in the prior year. This year, the market expects an improvement in earnings ($2.40 versus $1.98).
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- The debt-to-equity ratio is somewhat low, currently at 0.73, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that HPY's debt-to-equity ratio is low, the quick ratio, which is currently 0.67, displays a potential problem in covering short-term cash needs.
- You can view the full Heartland Payment Systems Ratings Report.