Trade-Ideas LLC identified

Coherent

(

COHR

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

  • COHR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $22.6 million.
  • COHR has traded 109,056 shares today.
  • COHR traded in a range 217% of the normal price range with a price range of $4.78.
  • COHR traded above its daily resistance level (quality: 532 days, meaning that the stock is crossing a resistance level set by the last 532 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 COHR:

Coherent, Inc. supplies photonics-based solutions for a range of commercial and scientific research applications worldwide. It operates through two segments: Specialty Lasers and Systems, and Commercial Lasers and Components. COHR has a PE ratio of 27. Currently there is 1 analyst that rates Coherent a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Coherent has been 222,500 shares per day over the past 30 days. Coherent has a market cap of $2.1 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.20 and a short float of 2.1% with 2.02 days to cover. Shares are up 36.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Coherent 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, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures 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:

  • 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 30.29% 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, COHR should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • COHERENT INC has improved earnings per share by 21.7% 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, COHERENT INC increased its bottom line by earning $3.06 versus $2.36 in the prior year. This year, the market expects an improvement in earnings ($4.48 versus $3.06).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income increased by 16.4% when compared to the same quarter one year prior, going from $17.43 million to $20.29 million.
  • COHR's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.89, which clearly demonstrates the ability to cover short-term cash needs.
  • 48.18% is the gross profit margin for COHERENT INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 10.66% is above that of the industry average.

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