Trade-Ideas LLC identified

Precision Castparts



) 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 Precision Castparts as such a stock due to the following factors:

  • PCP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $586.2 million.
  • PCP has traded 2.1 million shares today.
  • PCP traded in a range 984.5% of the normal price range with a price range of $10.01.
  • PCP traded above its daily resistance level (quality: 249 days, meaning that the stock is crossing a resistance level set by the last 249 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 PCP:

TheStreet Recommends

Precision Castparts Corp. manufactures and sells metal components and products to the aerospace, power, and general industrial and other markets worldwide. The company operates through three segments: Investment Cast Products, Forged Products, and Airframe Products. The stock currently has a dividend yield of 0.1%. PCP has a PE ratio of 21. Currently there are 5 analysts that rate Precision Castparts a buy, no analysts rate it a sell, and 12 rate it a hold.

The average volume for Precision Castparts has been 2.2 million shares per day over the past 30 days. Precision Castparts has a market cap of $31.6 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 0.47 and a short float of 2.4% with 1.13 days to cover. Shares are down 4.8% year-to-date as of the close of trading on Tuesday.

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TheStreet Quant Ratings

rates Precision Castparts as a


. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • The current debt-to-equity ratio, 0.47, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.23, which illustrates the ability to avoid short-term cash problems.
  • 36.11% is the gross profit margin for PRECISION CASTPARTS CORP which we consider to be strong. Regardless of PCP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PCP's net profit margin of 16.54% compares favorably to the industry average.
  • PRECISION CASTPARTS CORP's earnings per share declined by 13.6% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, PRECISION CASTPARTS CORP reported lower earnings of $10.71 versus $11.95 in the prior year. This year, the market expects an improvement in earnings ($12.54 versus $10.71).
  • PCP, with its decline in revenue, slightly underperformed the industry average of 5.0%. Since the same quarter one year prior, revenues slightly dropped by 4.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • After a year of stock price fluctuations, the net result is that PCP's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Despite the stock's decline during the last year, it is still somewhat more expensive (in proportion to its earnings over the last year) than most other stocks in its industry. We feel, however, that other strengths this company displays offset this slight negative.

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