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

Con-way

(

CNW

) 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 Con-way as such a stock due to the following factors:

  • CNW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $29.3 million.
  • CNW has traded 435,547 shares today.
  • CNW traded in a range 200.4% of the normal price range with a price range of $1.81.
  • CNW traded above its daily resistance level (quality: 27 days, meaning that the stock is crossing a resistance level set by the last 27 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 CNW:

Con-way Inc., together with its subsidiaries, provides transportation, logistics, and supply chain management services to various manufacturing, industrial, and retail customers in North America and internationally. It operates through three segments: Freight, Logistics, and Truckload. The stock currently has a dividend yield of 1.7%. CNW has a PE ratio of 14. Currently there are 3 analysts that rate Con-way a buy, 1 analyst rates it a sell, and 6 rate it a hold.

The average volume for Con-way has been 987,700 shares per day over the past 30 days. Con-way has a market cap of $2.1 billion and is part of the services sector and transportation industry. The stock has a beta of 1.02 and a short float of 12.5% with 9.40 days to cover. Shares are down 24.7% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Con-way as a

hold

. 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 and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.

Highlights from the ratings report include:

  • CNW's revenue growth has slightly outpaced the industry average of 9.0%. Since the same quarter one year prior, revenues slightly increased by 0.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.62, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, CNW has a quick ratio of 1.51, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for CON-WAY INC is currently extremely low, coming in at 8.15%. Regardless of CNW's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CNW's net profit margin of 1.58% is significantly lower than the industry average.
  • CNW'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 28.32%, 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, CNW is still more expensive than most of the other companies in its industry.

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