Trade-Ideas LLC identified

People's United Financial

(

PBCT

) 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 People's United Financial as such a stock due to the following factors:

  • PBCT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $50.5 million.
  • PBCT has traded 4.5 million shares today.
  • PBCT is trading at 1.51 times the normal volume for the stock at this time of day.
  • PBCT 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.

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More details on PBCT:

People's United Financial, Inc. operates as the bank holding company for People's United Bank that provides commercial banking, retail banking, and wealth management services to individual, corporate, and municipal customers. The stock currently has a dividend yield of 4.3%. PBCT has a PE ratio of 18. Currently there are no analysts that rate People's United Financial a buy, 2 analysts rate it a sell, and 8 rate it a hold.

The average volume for People's United Financial has been 4.6 million shares per day over the past 30 days. People's United Financial has a market cap of $4.9 billion and is part of the financial sector and banking industry. The stock has a beta of 0.72 and a short float of 17.1% with 13.87 days to cover. Shares are down 4.6% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates People's United Financial as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, expanding profit margins, good cash flow from operations and growth in earnings per share. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 5.3%. Since the same quarter one year prior, revenues slightly increased by 10.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Commercial Banks industry average. The net income increased by 9.4% when compared to the same quarter one year prior, going from $64.70 million to $70.80 million.
  • The gross profit margin for PEOPLE'S UNITED FINL INC is currently very high, coming in at 87.41%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.75% is above that of the industry average.
  • Net operating cash flow has increased to $129.10 million or 14.75% when compared to the same quarter last year. In addition, PEOPLE'S UNITED FINL INC has also vastly surpassed the industry average cash flow growth rate of -54.37%.
  • PEOPLE'S UNITED FINL INC's earnings per share improvement from the most recent quarter was slightly positive. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, PEOPLE'S UNITED FINL INC increased its bottom line by earning $0.86 versus $0.85 in the prior year. This year, the market expects an improvement in earnings ($0.92 versus $0.86).

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