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
) 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 Global Payments as such a stock due to the following factors:
- GPN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $48.5 million.
- GPN has traded 76,418 shares today.
- GPN traded in a range 343.2% of the normal price range with a price range of $6.35.
- GPN traded above its daily resistance level (quality: 7 days, meaning that the stock is crossing a resistance level set by the last 7 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 GPN:
Global Payments Inc. provides electronic payments transaction processing services. The company operates in two segments, North America Merchant Services and International Merchant Services. The stock currently has a dividend yield of 0.1%. GPN has a PE ratio of 27. Currently there are 7 analysts that rate Global Payments a buy, 1 analyst rates it a sell, and 11 rate it a hold.
The average volume for Global Payments has been 474,000 shares per day over the past 30 days. Global Payments has a market cap of $6.9 billion and is part of the services sector and diversified services industry. The stock has a beta of 0.89 and a short float of 1.7% with 2.54 days to cover. Shares are up 26.6% year-to-date as of the close of trading on Monday.
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rates Global Payments as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, increase in net income and good cash flow from operations. 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 revenue growth came in higher than the industry average of 21.5%. Since the same quarter one year prior, revenues slightly increased by 8.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 42.77% over the past year, a rise that has exceeded that of the S&P 500 Index. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- GLOBAL PAYMENTS INC has improved earnings per share by 22.4% 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, GLOBAL PAYMENTS INC increased its bottom line by earning $3.37 versus $2.76 in the prior year. This year, the market expects an improvement in earnings ($4.82 versus $3.37).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 13.5% when compared to the same quarter one year prior, going from $55.12 million to $62.57 million.
- Net operating cash flow has significantly increased by 223.50% to $120.15 million when compared to the same quarter last year. In addition, GLOBAL PAYMENTS INC has also vastly surpassed the industry average cash flow growth rate of -69.45%.
- You can view the full Global Payments Ratings Report.