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 Visa as such a stock due to the following factors:
- V has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $597.3 million.
- V has traded 4.2 million shares today.
- V traded in a range 262.8% of the normal price range with a price range of $8.98.
- V traded above its daily resistance level (quality: 12 days, meaning that the stock is crossing a resistance level set by the last 12 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 V:
Visa Inc., a payments technology company, engages in the operation of retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. The stock currently has a dividend yield of 0.8%. V has a PE ratio of 21.4. Currently there are 21 analysts that rate Visa a buy, no analysts rate it a sell, and 10 rate it a hold.
The average volume for Visa has been 3.7 million shares per day over the past 30 days. Visa has a market cap of $90.0 billion and is part of the financial sector and financial services industry. The stock has a beta of 0.50 and a short float of 2.2% with 3.54 days to cover. Shares are up 14.3% year to date as of the close of trading on Tuesday.
rates Visa as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and compelling growth in net income. 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 15.2%. Since the same quarter one year prior, revenues rose by 17.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- V has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, V has a quick ratio of 1.65, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for VISA INC is rather high; currently it is at 64.25%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 40.81% significantly outperformed against the industry average.
- Net operating cash flow has significantly increased by 71.59% to $2,157.00 million when compared to the same quarter last year. In addition, VISA INC has also vastly surpassed the industry average cash flow growth rate of -23.21%.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 166.6% when compared to the same quarter one year prior, rising from -$1,839.00 million to $1,225.00 million.
- You can view the full Visa Ratings Report.