Swift Transportation (SWFT) Marked As A Barbarian At The Gate - TheStreet

Trade-Ideas LLC identified

Swift Transportation

(

SWFT

) 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 Swift Transportation as such a stock due to the following factors:

  • SWFT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $59.9 million.
  • SWFT has traded 3.1 million shares today.
  • SWFT traded in a range 207.4% of the normal price range with a price range of $1.30.
  • SWFT traded above its daily resistance level (quality: 5 days, meaning that the stock is crossing a resistance level set by the last 5 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 SWFT:

Swift Transportation Company operates as a multi-faceted transportation services company in North America. The company operates through four segments: Truckload, Dedicated, Central Refrigerated, and Intermodal. SWFT has a PE ratio of 11. Currently there are 12 analysts that rate Swift Transportation a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Swift Transportation has been 3.3 million shares per day over the past 30 days. Swift Transportation has a market cap of $1.3 billion and is part of the services sector and transportation industry. The stock has a beta of 3.08 and a short float of 23.5% with 5.18 days to cover. Shares are down 49% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Swift Transportation as a

hold

. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, poor profit margins and generally higher debt management risk.

Highlights from the ratings report include:

  • SWIFT TRANSPORTATION CO has improved earnings per share by 25.0% 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, SWIFT TRANSPORTATION CO increased its bottom line by earning $1.13 versus $1.10 in the prior year. This year, the market expects an improvement in earnings ($1.48 versus $1.13).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Road & Rail industry. The net income increased by 26.8% when compared to the same quarter one year prior, rising from $40.20 million to $50.95 million.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 8.3%. Since the same quarter one year prior, revenues slightly dropped by 1.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for SWIFT TRANSPORTATION CO is currently extremely low, coming in at 14.43%. Regardless of SWFT's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SWFT's net profit margin of 4.80% is significantly lower than the industry average.
  • SWFT's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 33.96%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, SWFT is still more expensive than most of the other companies in its industry.

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