Trade-Ideas LLC identified

Digital Realty

(

DLR

) 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 Digital Realty as such a stock due to the following factors:

  • DLR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $81.9 million.
  • DLR has traded 741,513 shares today.
  • DLR traded in a range 201.6% of the normal price range with a price range of $2.38.
  • DLR traded above its daily resistance level (quality: 3 days, meaning that the stock is crossing a resistance level set by the last 3 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in DLR with the Ticky from Trade-Ideas. See the FREE profile for DLR NOW at Trade-Ideas

More details on DLR:

TheStreet Recommends

Digital Realty Trust, Inc., a real estate investment trust (REIT), through its controlling interest in Digital Realty Trust, L.P., engages in the ownership, acquisition, development, redevelopment, and management of technology-related real estate. The stock currently has a dividend yield of 4.7%. DLR has a PE ratio of 36. Currently there are 7 analysts that rate Digital Realty a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Digital Realty has been 1.2 million shares per day over the past 30 days. Digital has a market cap of $9.9 billion and is part of the financial sector and real estate industry. The stock has a beta of -0.47 and a short float of 11.6% with 9.67 days to cover. Shares are up 8.4% year-to-date as of the close of trading on Thursday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Digital Realty as a

buy

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, revenue growth, reasonable valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 124.6% when compared to the same quarter one year prior, rising from $60.34 million to $135.51 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.8%. Since the same quarter one year prior, revenues slightly increased by 4.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has slightly increased to $216.23 million or 8.73% when compared to the same quarter last year. Despite an increase in cash flow, DIGITAL REALTY TRUST INC's average is still marginally south of the industry average growth rate of 13.29%.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.