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 Interactive Brokers Group as such a stock due to the following factors:
- IBKR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $36.4 million.
- IBKR has traded 1.1 million shares today.
- IBKR traded in a range 225.8% of the normal price range with a price range of $1.96.
- IBKR traded above its daily resistance level (quality: 7 days, meaning that the stock is crossing a resistance level set by the last 7 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 IBKR:
Interactive Brokers Group, Inc. operates as an automated electronic broker and market maker. The stock currently has a dividend yield of 1.4%. IBKR has a PE ratio of 39.6. Currently there are 2 analysts that rate Interactive Brokers Group a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for Interactive Brokers Group has been 567,500 shares per day over the past 30 days. Interactive Brokers Group has a market cap of $1.6 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.01 and a short float of 1.7% with 0.65 days to cover. Shares are down 3.6% year-to-date as of the close of trading on Tuesday.
rates Interactive Brokers Group as a
. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
Highlights from the ratings report include:
- Net operating cash flow has increased to $242.99 million or 17.89% when compared to the same quarter last year. In addition, INTERACTIVE BROKERS GROUP has also vastly surpassed the industry average cash flow growth rate of -217.06%.
- 45.50% is the gross profit margin for INTERACTIVE BROKERS GROUP which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, IBKR's net profit margin of 1.63% is significantly lower than the industry average.
- The revenue fell significantly faster than the industry average of 0.2%. Since the same quarter one year prior, revenues fell by 42.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 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.
- INTERACTIVE BROKERS GROUP 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, INTERACTIVE BROKERS GROUP reported lower earnings of $0.74 versus $0.89 in the prior year. For the next year, the market is expecting a contraction of 25.7% in earnings ($0.55 versus $0.74).
- You can view the full Interactive Brokers Group Ratings Report.