Trade-Ideas LLC identified

Regions Financial

(

RF

) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Regions Financial as such a stock due to the following factors:

  • RF has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $141.2 million.
  • RF has traded 10.5 million shares today.
  • RF is trading at 1.79 times the normal volume for the stock at this time of day.
  • RF crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on RF:

Regions Financial Corporation, together with its subsidiaries, provides banking and bank-related services to individual and corporate customers in the United States. The stock currently has a dividend yield of 2.5%. RF has a PE ratio of 13. Currently there are 9 analysts that rate Regions Financial a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for Regions Financial has been 16.3 million shares per day over the past 30 days. Regions Financial has a market cap of $12.6 billion and is part of the financial sector and banking industry. The stock has a beta of 1.05 and a short float of 1.6% with 1.53 days to cover. Shares are down 9.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Regions Financial as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • RF's revenue growth has slightly outpaced the industry average of 3.3%. Since the same quarter one year prior, revenues slightly increased by 1.7%. 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.
  • The gross profit margin for REGIONS FINANCIAL CORP is currently very high, coming in at 91.06%. Regardless of RF's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 18.45% trails the industry average.
  • In its most recent trading session, RF has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
  • REGIONS FINANCIAL CORP's earnings per share declined by 13.6% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. Despite the past stability of earnings, the consensus estimate anticipates a weakening in earnings. During the past fiscal year, REGIONS FINANCIAL CORP's EPS of $0.78 remained unchanged from the prior years' EPS of $0.78. For the next year, the market is expecting a contraction of 5.1% in earnings ($0.74 versus $0.78).
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Commercial Banks industry average. The net income has decreased by 20.6% when compared to the same quarter one year ago, dropping from $325.00 million to $258.00 million.

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