Trade-Ideas: Coca-Cola (CCE) Is Today's "Barbarian At The Gate" Stock - TheStreet

Trade-Ideas LLC identified

Coca-Cola

(

CCE

) 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 Coca-Cola as such a stock due to the following factors:

  • CCE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $81.1 million.
  • CCE has traded 138,059 shares today.
  • CCE traded in a range 216.9% of the normal price range with a price range of $1.52.
  • CCE traded above its daily resistance level (quality: 55 days, meaning that the stock is crossing a resistance level set by the last 55 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 CCE:

Coca-Cola Enterprises, Inc. produces, distributes, and markets non-alcoholic beverages in Belgium, continental France, Great Britain, Luxembourg, Monaco, the Netherlands, Norway, and Sweden. The stock currently has a dividend yield of 2.2%. CCE has a PE ratio of 2. Currently there are 3 analysts that rate Coca-Cola a buy, 2 analysts rate it a sell, and 8 rate it a hold.

The average volume for Coca-Cola has been 3.1 million shares per day over the past 30 days. Coca-Cola has a market cap of $11.6 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 1.20 and a short float of 3.2% with 4.66 days to cover. Shares are up 16.3% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Coca-Cola as a

buy

. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • 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. Compared to other companies in the Beverages industry and the overall market, COCA-COLA ENTERPRISES INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $203.00 million or 39.04% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -7.69%.
  • 40.04% is the gross profit margin for COCA-COLA ENTERPRISES 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 9.12% trails the industry average.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. 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.
  • COCA-COLA ENTERPRISES INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, COCA-COLA ENTERPRISES INC increased its bottom line by earning $2.64 versus $2.45 in the prior year. For the next year, the market is expecting a contraction of 3.4% in earnings ($2.55 versus $2.64).

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