Trade-Ideas: Tim Participacoes (TSU) Is Today's "Barbarian At The Gate" Stock
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 or Stephanie Link.
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 Tim Participacoes as such a stock due to the following factors:
- TSU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.0 million.
- TSU has traded 997,430 shares today.
- TSU traded in a range 311.2% of the normal price range with a price range of $2.55.
- TSU traded above its daily resistance level (quality: 14 days, meaning that the stock is crossing a resistance level set by the last 14 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 TSU:
TheStreet Recommends
TIM Participac es S.A., through its subsidiaries, provides telecommunication services in Brazil. The company offers mobile, fixed, and long distance telephony; data transmission; and Internet services. The stock currently has a dividend yield of 3.4%. TSU has a PE ratio of 14.4. Currently there are 4 analysts that rate Tim Participacoes a buy, no analysts rate it a sell, and 3 rate it a hold.
The average volume for Tim Participacoes has been 1.5 million shares per day over the past 30 days. Tim Participacoes has a market cap of $10.6 billion and is part of the technology sector and telecommunications industry. Shares are down 15.3% year-to-date as of the close of trading on Tuesday.
Analysis:
rates Tim Participacoes as a
. The company's strengths can be seen in multiple areas, such as its expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and disappointing return on equity.
Highlights from the ratings report include:
- The gross profit margin for TIM PARTICIPACOES SA is rather high; currently it is at 59.95%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, TSU's net profit margin of 6.98% significantly trails the industry average.
- The revenue fell significantly faster than the industry average of 58.8%. Since the same quarter one year prior, revenues fell by 31.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- Net operating cash flow has decreased to $695.19 million or 27.37% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, TIM PARTICIPACOES SA has marginally lower results.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Wireless Telecommunication Services industry. The net income has decreased by 22.5% when compared to the same quarter one year ago, dropping from $140.28 million to $108.70 million.
- You can view the full Tim Participacoes Ratings Report.
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