Trade-Ideas LLC identified

Salesforce.com

(

CRM

) 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 Salesforce.com as such a stock due to the following factors:

  • CRM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $302.2 million.
  • CRM has traded 5.7 million shares today.
  • CRM traded in a range 239.2% of the normal price range with a price range of $4.02.
  • CRM traded above its daily resistance level (quality: 5 days, meaning that the stock is crossing a resistance level set by the last 5 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 CRM:

TheStreet Recommends

salesforce.com, inc. provides enterprise cloud computing solutions, with a focus on customer relationship management to various businesses and industries worldwide. Currently there are 26 analysts that rate Salesforce.com a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for Salesforce.com has been 3.8 million shares per day over the past 30 days. Salesforce.com has a market cap of $45.1 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.20 and a short float of 3% with 3.34 days to cover. Shares are up 17.1% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Salesforce.com as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, compelling growth in net income, good cash flow from operations and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 10.1%. Since the same quarter one year prior, revenues rose by 24.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 98.6% when compared to the same quarter one year prior, rising from -$61.09 million to -$0.85 million.
  • Net operating cash flow has increased to $304.41 million or 23.79% when compared to the same quarter last year. In addition, SALESFORCE.COM INC has also vastly surpassed the industry average cash flow growth rate of -30.52%.
  • The gross profit margin for SALESFORCE.COM INC is currently very high, coming in at 81.91%. Regardless of CRM's high profit margin, it has managed to decrease from the same period last year.

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