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 Carpenter Technology as such a stock due to the following factors:
- CRS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $29.3 million.
- CRS has traded 315,975 shares today.
- CRS traded in a range 308.6% of the normal price range with a price range of $3.92.
- CRS traded above its daily resistance level (quality: 29 days, meaning that the stock is crossing a resistance level set by the last 29 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 CRS:
Carpenter Technology Corporation manufactures, fabricates, and distributes specialty metals worldwide. The company operates in two segments: Specialty Alloys Operations and Performance Engineered Products. The stock currently has a dividend yield of 1.4%. CRS has a PE ratio of 20.7. Currently there are 2 analysts that rate Carpenter Technology a buy, no analysts rate it a sell, and 3 rate it a hold.
The average volume for Carpenter Technology has been 421,600 shares per day over the past 30 days. Carpenter Technology has a market cap of $2.4 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 2.07 and a short float of 1.8% with 1.39 days to cover. Shares are down 29.4% year-to-date as of the close of trading on Wednesday.
rates Carpenter Technology as a
. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including deteriorating net income, poor profit margins and weak operating cash flow.
Highlights from the ratings report include:
- CRS, with its decline in revenue, slightly underperformed the industry average of 0.1%. Since the same quarter one year prior, revenues slightly dropped by 1.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.40, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.07 is sturdy.
- CARPENTER TECHNOLOGY CORP's earnings per share declined by 7.8% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CARPENTER TECHNOLOGY CORP reported lower earnings of $2.48 versus $2.75 in the prior year. This year, the market expects an improvement in earnings ($2.55 versus $2.48).
- Net operating cash flow has decreased to $95.60 million or 47.90% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Metals & Mining industry average. The net income has decreased by 7.1% when compared to the same quarter one year ago, dropping from $41.00 million to $38.10 million.
- You can view the full Carpenter Technology Ratings Report.