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 or Stephanie Link.
Trade-Ideas LLC identified
) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Accenture as such a stock due to the following factors:
- ACN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $219.6 million.
- ACN has traded 806,939 shares today.
- ACN is trading at 2.70 times the normal volume for the stock at this time of day.
- ACN crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.
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More details on ACN:
Accenture plc provides management consulting, technology, and business process outsourcing services worldwide. The stock currently has a dividend yield of 2.1%. ACN has a PE ratio of 16.1. Currently there are 12 analysts that rate Accenture a buy, 1 analyst rates it a sell, and 7 rate it a hold.
The average volume for Accenture has been 3.6 million shares per day over the past 30 days. Accenture has a market cap of $49.9 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.39 and a short float of 1.5% with 3.34 days to cover. Shares are up 16.3% year to date as of the close of trading on Monday.
rates Accenture as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 15.4%. Since the same quarter one year prior, revenues slightly increased by 0.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- ACN has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.41, which illustrates the ability to avoid short-term cash problems.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- ACCENTURE PLC has improved earnings per share by 17.5% 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 two years. We feel that this trend should continue. During the past fiscal year, ACCENTURE PLC increased its bottom line by earning $3.84 versus $3.40 in the prior year. This year, the market expects an improvement in earnings ($4.20 versus $3.84).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the IT Services industry average. The net income increased by 17.6% when compared to the same quarter one year prior, going from $689.22 million to $810.26 million.
- You can view the full Accenture Ratings Report.