SABR has made an orderly advance in the chart above. We see a rally, and then a sideways to slightly lower correction before starting another rally. Prices have stayed well above the rising 200-day moving average, and the 50-day average has been a good trading vehicle for aggressive traders.
The On-Balance-Volume (OBV) line has moved higher, mirroring and confirming the price action. SABR is not extended, so instead of buying a pullback we would suggest buying a close above $30 and then risk below the 50-day moving average.
TheStreet Ratings team rates SABRE CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate SABRE CORP (SABR) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 26.8%. Since the same quarter one year prior, revenues slightly increased by 9.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- SABRE CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, SABRE CORP turned its bottom line around by earning $0.40 versus -$0.04 in the prior year. This year, the market expects an improvement in earnings ($1.10 versus $0.40).
- 44.61% is the gross profit margin for SABRE CORP which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, SABR's net profit margin of 4.55% significantly trails the industry average.
- Powered by its strong earnings growth of 450.00% and other important driving factors, this stock has surged by 80.06% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- The debt-to-equity ratio is very high at 10.33 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, SABR maintains a poor quick ratio of 0.79, which illustrates the inability to avoid short-term cash problems.
- You can view the full analysis from the report here: SABR