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.

Trade-Ideas LLC identified

Hyatt Hotels

(

H

) 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 Hyatt Hotels as such a stock due to the following factors:

  • H has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $23.7 million.
  • H has traded 572,366 shares today.
  • H traded in a range 201.7% of the normal price range with a price range of $2.31.
  • H traded above its daily resistance level (quality: 1 day, meaning that the stock is crossing a resistance level set by the last 1 calendar day. 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 H:

Hyatt Hotels Corporation, a hospitality company, develops, owns, operates, manages, franchises, licenses, or provides services to full and select service hotels, resorts, and residential and vacation properties worldwide. H has a PE ratio of 25.9. Currently there are 9 analysts that rate Hyatt Hotels a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Hyatt Hotels has been 436,400 shares per day over the past 30 days. Hyatt Hotels has a market cap of $2.1 billion and is part of the services sector and leisure industry. The stock has a beta of 1.53 and a short float of 3.4% with 2.64 days to cover. Shares are down 6.5% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Hyatt Hotels as a

buy

. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 468.8% when compared to the same quarter one year prior, rising from $32.00 million to $182.00 million.
  • The current debt-to-equity ratio, 0.30, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, H has a quick ratio of 2.06, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has increased to $111.00 million or 11.00% when compared to the same quarter last year. Despite an increase in cash flow, HYATT HOTELS CORP's cash flow growth rate is still lower than the industry average growth rate of 40.33%.

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