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

DCT Industrial

(

DCT

) 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 DCT Industrial as such a stock due to the following factors:

  • DCT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $28.6 million.
  • DCT has traded 136,594 shares today.
  • DCT traded in a range 212.7% of the normal price range with a price range of $1.17.
  • DCT traded above its daily resistance level (quality: 114 days, meaning that the stock is crossing a resistance level set by the last 114 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 DCT:

DCT Industrial Trust Inc. operates as a publicly owned real estate investment trust. The firm provides its services to companies. Through its fund, it engages in the ownership, operation, and development of real estate properties. The stock currently has a dividend yield of 3.3%. DCT has a PE ratio of 64. Currently there are 4 analysts that rate DCT Industrial a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for DCT Industrial has been 834,100 shares per day over the past 30 days. DCT Industrial has a market cap of $3.0 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.92 and a short float of 4.8% with 3.37 days to cover. Shares are down 5% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates DCT Industrial as a

buy

. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, good cash flow from operations, increase in stock price during the past year and notable return on equity. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 8967.8% when compared to the same quarter one year prior, rising from $0.32 million to $28.75 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.9%. Since the same quarter one year prior, revenues slightly increased by 2.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has slightly increased to $34.17 million or 4.53% when compared to the same quarter last year. In addition, DCT INDUSTRIAL TRUST INC has also modestly surpassed the industry average cash flow growth rate of -1.20%.
  • DCT INDUSTRIAL TRUST INC has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, DCT INDUSTRIAL TRUST INC turned its bottom line around by earning $0.54 versus -$0.12 in the prior year. For the next year, the market is expecting a contraction of 61.1% in earnings ($0.21 versus $0.54).
  • This stock has managed to decline in share value by 3.38% over the past twelve months. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

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