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.
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 Waste Connections as such a stock due to the following factors:
- WCN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.0 million.
- WCN has traded 65,671 shares today.
- WCN traded in a range 327.8% of the normal price range with a price range of $1.90.
- WCN traded above its daily resistance level (quality: 7 days, meaning that the stock is crossing a resistance level set by the last 7 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 WCN:
Waste Connections, Inc., an integrated municipal solid waste (MSW) services company, provides solid waste collection, transfer, disposal, and recycling services primarily in the United States. The stock currently has a dividend yield of 1.1%. WCN has a PE ratio of 25. Currently there are 7 analysts that rate Waste Connections a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for Waste Connections has been 616,800 shares per day over the past 30 days. Waste Connections has a market cap of $5.9 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 0.79 and a short float of 2.3% with 5.65 days to cover. Shares are up 7% year-to-date as of the close of trading on Monday.
rates Waste Connections as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- WCN's revenue growth has slightly outpaced the industry average of 3.8%. Since the same quarter one year prior, revenues slightly increased by 5.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- WASTE CONNECTIONS INC has improved earnings per share by 7.7% 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, WASTE CONNECTIONS INC increased its bottom line by earning $1.86 versus $1.58 in the prior year. This year, the market expects an improvement in earnings ($1.99 versus $1.86).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Commercial Services & Supplies industry average. The net income increased by 5.7% when compared to the same quarter one year prior, going from $49.02 million to $51.82 million.
- Net operating cash flow has increased to $162.57 million or 12.15% when compared to the same quarter last year. In addition, WASTE CONNECTIONS INC has also modestly surpassed the industry average cash flow growth rate of 7.61%.
- The debt-to-equity ratio is somewhat low, currently at 0.89, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.75 is somewhat weak and could be cause for future problems.
- You can view the full Waste Connections Ratings Report.