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

RPC

(

RES

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

  • RES has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $20.3 million.
  • RES has traded 801,115 shares today.
  • RES traded in a range 240.7% of the normal price range with a price range of $1.26.
  • RES traded above its daily resistance level (quality: 4 days, meaning that the stock is crossing a resistance level set by the last 4 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 RES:

RPC, Inc. provides a range of oilfield services and equipment for oil and gas companies involved in the exploration, production, and development of oil and gas properties in the United States, Africa, Canada, China, Eastern Europe, Latin America, the Middle East, and New Zealand. The stock currently has a dividend yield of 1.7%. RES has a PE ratio of 12. Currently there are 4 analysts that rate RPC a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for RPC has been 1.5 million shares per day over the past 30 days. RPC has a market cap of $2.5 billion and is part of the basic materials sector and energy industry. The stock has a beta of 0.99 and a short float of 18.3% with 6.33 days to cover. Shares are down 6.7% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates RPC as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • RES's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.45, which clearly demonstrates the ability to cover short-term cash needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Energy Equipment & Services industry and the overall market on the basis of return on equity, RPC INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Energy Equipment & Services industry. The net income has significantly decreased by 80.8% when compared to the same quarter one year ago, falling from $39.39 million to $7.55 million.
  • The gross profit margin for RPC INC is currently lower than what is desirable, coming in at 28.02%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.85% trails that of the industry average.

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