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 "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 Avis Budget Group as such a stock due to the following factors:
- CAR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $45.4 million.
- CAR has traded 2.3 million shares today.
- CAR traded in a range 208.7% of the normal price range with a price range of $1.69.
- CAR traded above its daily resistance level (quality: 35 days, meaning that the stock is crossing a resistance level set by the last 35 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 CAR:
Avis Budget Group, Inc., together with its subsidiaries, provides car and truck rentals, and ancillary services to businesses and consumers worldwide. CAR has a PE ratio of 23.8. Currently there are 3 analysts that rate Avis Budget Group a buy, 1 analyst rates it a sell, and 1 rates it a hold.
The average volume for Avis Budget Group has been 1.4 million shares per day over the past 30 days. Avis Budget Group has a market cap of $3.2 billion and is part of the services sector and diversified services industry. The stock has a beta of 2.55 and a short float of 12.7% with 9.12 days to cover. Shares are up 51.5% year to date as of the close of trading on Friday.
rates Avis Budget Group as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and feeble growth in the company's earnings per share.
Highlights from the ratings report include:
- CAR's revenue growth has slightly outpaced the industry average of 3.5%. Since the same quarter one year prior, revenues slightly increased by 7.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Road & Rail industry and the overall market, AVIS BUDGET GROUP INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- 48.65% is the gross profit margin for AVIS BUDGET GROUP INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -1.39% is in-line with the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Road & Rail industry. The net income has significantly decreased by 135.4% when compared to the same quarter one year ago, falling from $79.00 million to -$28.00 million.
- The debt-to-equity ratio is very high at 19.77 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, CAR has a quick ratio of 0.66, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- You can view the full Avis Budget Group Ratings Report.