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

IAC/InterActiveCorp

(

IACI

) 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 IAC/InterActiveCorp as such a stock due to the following factors:

  • IACI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $62.0 million.
  • IACI has traded 214,633 shares today.
  • IACI traded in a range 217% of the normal price range with a price range of $3.84.
  • IACI traded below its daily resistance level (quality: 34 days, meaning that the stock is crossing a resistance level set by the last 34 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 IACI:

IAC/InterActiveCorp operates as a media and Internet company in the United States and internationally. It operates through four segments: The Match Group, Search & Applications, Media, and eCommerce. The stock currently has a dividend yield of 1.7%. IACI has a PE ratio of 31. Currently there are 8 analysts that rate IAC/InterActiveCorp a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for IAC/InterActiveCorp has been 779,000 shares per day over the past 30 days. IAC/InterActiveCorp has a market cap of $6.1 billion and is part of the technology sector and internet industry. The stock has a beta of 0.94 and a short float of 1.8% with 1.71 days to cover. Shares are up 32.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates IAC/InterActiveCorp as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, expanding profit margins, largely solid financial position with reasonable debt levels by most measures 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:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 5.4%. Since the same quarter one year prior, revenues slightly increased by 4.3%. 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.
  • The gross profit margin for IAC/INTERACTIVECORP is currently very high, coming in at 75.20%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, IACI's net profit margin of 3.41% significantly trails the industry average.
  • IACI's debt-to-equity ratio of 0.62 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that IACI's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.77 is high and demonstrates strong liquidity.
  • 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. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.

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