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

MedAssets

(

MDAS

) 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 MedAssets as such a stock due to the following factors:

  • MDAS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $21.1 million.
  • MDAS has traded 112,405 shares today.
  • MDAS traded in a range 246.8% of the normal price range with a price range of $1.42.
  • MDAS traded above its daily resistance level (quality: 273 days, meaning that the stock is crossing a resistance level set by the last 273 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 MDAS with the Ticky from Trade-Ideas. See the FREE profile for MDAS NOW at Trade-Ideas

More details on MDAS:

MedAssets, Inc., a performance improvement company, provides technology-enabled products and services for hospitals, health systems, non-acute healthcare providers, payers, and other service providers and product manufacturers in the United States. Currently there are 6 analysts that rate MedAssets a buy, 2 analysts rate it a sell, and 10 rate it a hold.

The average volume for MedAssets has been 578,100 shares per day over the past 30 days. MedAssets has a market cap of $1.2 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.89 and a short float of 7.9% with 5.15 days to cover. Shares are up 7.8% year-to-date as of the close of trading on Wednesday.

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 MedAssets as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:

  • The revenue growth significantly trails the industry average of 39.7%. Since the same quarter one year prior, revenues slightly increased by 8.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 95.13% to $34.60 million when compared to the same quarter last year. In addition, MEDASSETS INC has also vastly surpassed the industry average cash flow growth rate of 44.12%.
  • The gross profit margin for MEDASSETS INC is currently very high, coming in at 77.39%. Regardless of MDAS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MDAS's net profit margin of 1.80% is significantly lower than the industry average.
  • Currently the debt-to-equity ratio of 1.94 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. To add to this, MDAS has a quick ratio of 0.58, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Health Care Technology industry and the overall market, MEDASSETS INC's return on equity significantly trails that of both the industry average and the S&P 500.

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.