Trade-Ideas LLC identified

VeriSign

(

VRSN

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

  • VRSN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $77.0 million.
  • VRSN has traded 474,103 shares today.
  • VRSN is trading at 2.68 times the normal volume for the stock at this time of day.
  • VRSN 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 VRSN:

VeriSign, Inc. provides domain name registry services and Internet security worldwide. The company offers registry services that operate the authoritative directory of .com, .net, .cc, .tv, and .name domain names, as well as the back-end systems for .gov, .jobs, .edu, and other domain names. VRSN has a PE ratio of 28. Currently there are no analysts that rate VeriSign a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for VeriSign has been 752,500 shares per day over the past 30 days. VeriSign has a market cap of $9.0 billion and is part of the technology sector and internet industry. The stock has a beta of 1.14 and a short float of 30.1% with 19.69 days to cover. Shares are down 4.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates VeriSign as a

buy

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, revenue growth, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 31.93% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, VRSN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • VERISIGN INC has improved earnings per share by 24.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, VERISIGN INC increased its bottom line by earning $2.82 versus $2.52 in the prior year. This year, the market expects an improvement in earnings ($3.50 versus $2.82).
  • VRSN's revenue growth trails the industry average of 20.6%. Since the same quarter one year prior, revenues slightly increased by 9.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for VERISIGN INC is currently very high, coming in at 87.33%. Regardless of VRSN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, VRSN's net profit margin of 38.12% significantly outperformed against the industry.
  • Net operating cash flow has slightly increased to $143.63 million or 8.25% when compared to the same quarter last year. Despite an increase in cash flow, VERISIGN INC's cash flow growth rate is still lower than the industry average growth rate of 19.55%.

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