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 "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Kellogg as such a stock due to the following factors:
- K has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $120.6 million.
- K has traded 420,243 shares today.
- K is trading at 2.83 times the normal volume for the stock at this time of day.
- K crossed above its 200-day simple moving average.
'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in K with the Ticky from Trade-Ideas. See the FREE profile for K NOW at Trade-Ideas
More details on K:
Kellogg Company, together with its subsidiaries, manufactures and markets ready-to-eat cereal and convenience food products primarily in the United States and the United Kingdom. The company operates through U.S. Morning Foods, U.S. Snacks, U.S. The stock currently has a dividend yield of 3.1%. K has a PE ratio of 12.4. Currently there are 2 analysts that rate Kellogg a buy, 4 analysts rate it a sell, and 6 rate it a hold.
The average volume for Kellogg has been 1.7 million shares per day over the past 30 days. Kellogg has a market cap of $22.6 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 0.75 and a short float of 2.1% with 2.79 days to cover. Shares are up 2.3% year-to-date as of the close of trading on Wednesday.
rates Kellogg as a
. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations and expanding profit margins. 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 company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Food Products industry and the overall market, KELLOGG CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has slightly increased to $386.00 million or 5.17% when compared to the same quarter last year. Despite an increase in cash flow, KELLOGG CO's average is still marginally south of the industry average growth rate of 7.60%.
- 42.52% is the gross profit margin for KELLOGG CO which we consider to be strong. Regardless of K's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 8.00% trails the industry average.
- K, with its decline in revenue, slightly underperformed the industry average of 0.5%. Since the same quarter one year prior, revenues slightly dropped by 0.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- KELLOGG CO's earnings per share declined by 14.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, KELLOGG CO increased its bottom line by earning $4.95 versus $2.68 in the prior year. For the next year, the market is expecting a contraction of 21.0% in earnings ($3.91 versus $4.95).
- You can view the full Kellogg Ratings Report.