Trade-Ideas LLC identified

East West Bancorp

(

EWBC

) 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 East West Bancorp as such a stock due to the following factors:

  • EWBC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $30.4 million.
  • EWBC has traded 1.3 million shares today.
  • EWBC traded in a range 214.2% of the normal price range with a price range of $2.02.
  • EWBC traded above its daily resistance level (quality: 18 days, meaning that the stock is crossing a resistance level set by the last 18 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 EWBC:

East West Bancorp, Inc. operates as the bank holding company for East West Bank that provides a range of personal and commercial banking services to small and medium-sized businesses, business executives, professionals, and other individuals. The stock currently has a dividend yield of 2.2%. EWBC has a PE ratio of 13. Currently there are 7 analysts that rate East West Bancorp a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for East West Bancorp has been 1.1 million shares per day over the past 30 days. East West has a market cap of $5.2 billion and is part of the financial sector and banking industry. The stock has a beta of 1.49 and a short float of 1% with 1.85 days to cover. Shares are down 13.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates East West Bancorp as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • EWBC's revenue growth has slightly outpaced the industry average of 2.6%. Since the same quarter one year prior, revenues slightly increased by 3.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • EAST WEST BANCORP INC has improved earnings per share by 7.2% 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, EAST WEST BANCORP INC increased its bottom line by earning $2.65 versus $2.41 in the prior year. This year, the market expects an improvement in earnings ($2.88 versus $2.65).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Commercial Banks industry average. The net income increased by 7.5% when compared to the same quarter one year prior, going from $100.03 million to $107.52 million.
  • The gross profit margin for EAST WEST BANCORP INC is currently very high, coming in at 91.98%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 33.95% is above that of the industry average.
  • Net operating cash flow has increased to $183.55 million or 46.21% when compared to the same quarter last year. In addition, EAST WEST BANCORP INC has also vastly surpassed the industry average cash flow growth rate of -114.97%.

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