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 "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified IHS as such a stock due to the following factors:
- IHS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $53.1 million.
- IHS has traded 89,711 shares today.
- IHS is trading at 3.38 times the normal volume for the stock at this time of day.
- IHS crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.
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More details on IHS:
IHS Inc. provides critical information, insights, and analytics worldwide. IHS has a PE ratio of 49.6. Currently there are 6 analysts that rate IHS a buy, no analysts rate it a sell, and 7 rate it a hold.
The average volume for IHS has been 221,200 shares per day over the past 30 days. IHS has a market cap of $8.6 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.87 and a short float of 2% with 2.09 days to cover. Shares are up 6% year-to-date as of the close of trading on Wednesday.
rates IHS as a
. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, robust revenue growth, expanding profit margins, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Professional Services industry. The net income increased by 99.1% when compared to the same quarter one year prior, rising from $23.36 million to $46.52 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 18.1%. Since the same quarter one year prior, revenues rose by 15.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The gross profit margin for IHS INC is rather high; currently it is at 60.81%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 8.36% is above that of the industry average.
- Net operating cash flow has significantly increased by 101.28% to $167.48 million when compared to the same quarter last year. In addition, IHS INC has also vastly surpassed the industry average cash flow growth rate of 18.08%.
- 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. 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.
- You can view the full IHS Ratings Report.