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.

Trade-Ideas LLC identified

Delta Air Lines

(

DAL

) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Delta Air Lines as such a stock due to the following factors:

  • DAL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $531.5 million.
  • DAL has a PE ratio of 32.5.
  • DAL is currently in the upper 30% of its 1-year range.
  • DAL is in the upper 25% of its 20-day range.
  • DAL is in the upper 35% of its 5-day range.
  • DAL is currently trading above yesterday's high.
  • DAL has experienced a gap between today's open and yesterday's close of 0.7%.

'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.

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More details on DAL:

Delta Air Lines, Inc. provides scheduled air transportation for passengers and cargo worldwide. The company operates in two segments, Airline and Refinery. Its route network comprises various gateway airports in Amsterdam, Detroit, Los Angeles, Minneapolis-St. The stock currently has a dividend yield of 0.8%. DAL has a PE ratio of 32.5. Currently there are 12 analysts that rate Delta Air Lines a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Delta Air Lines has been 12.3 million shares per day over the past 30 days. Delta Air Lines has a market cap of $38.0 billion and is part of the services sector and transportation industry. The stock has a beta of 0.59 and a short float of 2% with 1.53 days to cover. Shares are down 5.4% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Delta Air Lines as a

buy

. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, good cash flow from operations, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Airlines industry average. The net income increased by 250.2% when compared to the same quarter one year prior, rising from $213.00 million to $746.00 million.
  • DAL's revenue growth trails the industry average of 16.9%. Since the same quarter one year prior, revenues slightly increased by 5.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 260.00% and other important driving factors, this stock has surged by 33.81% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • DELTA AIR LINES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, DELTA AIR LINES INC reported lower earnings of $0.75 versus $12.29 in the prior year. This year, the market expects an improvement in earnings ($4.66 versus $0.75).
  • Net operating cash flow has significantly increased by 72.02% to $1,636.00 million when compared to the same quarter last year. Despite an increase in cash flow of 72.02%, DELTA AIR LINES INC is still growing at a significantly lower rate than the industry average of 12128.79%.

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