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 $897.0 million.
- V has traded 8.7 million shares today.
- V traded in a range 217.8% of the normal price range with a price range of $4.15.
- V traded above its daily resistance level (quality: 6 days, meaning that the stock is crossing a resistance level set by the last 6 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, operates an open-loop payments network worldwide. The company 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 27. Currently there are 19 analysts that rate Visa a buy, no analysts rate it a sell, and 3 rate it a hold.
The average volume for Visa has been 9.9 million shares per day over the past 30 days. Visa has a market cap of $137.3 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.04 and a short float of 2.3% with 3.63 days to cover. Shares are down 10.6% year-to-date as of the close of trading on Thursday.
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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, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 19.9%. Since the same quarter one year prior, revenues rose by 10.6%. 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 1.76, which demonstrates the ability of the company to cover short-term liquidity needs.
- VISA INC has improved earnings per share by 44.2% 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 two years. We feel that this trend should continue. During the past fiscal year, VISA INC increased its bottom line by earning $2.57 versus $2.15 in the prior year. This year, the market expects an improvement in earnings ($2.87 versus $2.57).
- 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 40.9% when compared to the same quarter one year prior, rising from $1,073.00 million to $1,512.00 million.
- The gross profit margin for VISA INC is rather high; currently it is at 67.57%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 42.34% significantly outperformed against the industry average.
- You can view the full Visa Ratings Report.