Trade-Ideas LLC identified

Heartland Payment Systems

(

HPY

) 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 Heartland Payment Systems as such a stock due to the following factors:

  • HPY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $39.4 million.
  • HPY has traded 187,276 shares today.
  • HPY traded in a range 226.9% of the normal price range with a price range of $1.99.
  • HPY traded above its daily resistance level (quality: 24 days, meaning that the stock is crossing a resistance level set by the last 24 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 HPY:

Heartland Payment Systems, Inc. provides payment processing services to small and mid-sized merchants and network services merchants in the United States. The stock currently has a dividend yield of 0.4%. HPY has a PE ratio of 41. Currently there are no analysts that rate Heartland Payment Systems a buy, 1 analyst rates it a sell, and 14 rate it a hold.

The average volume for Heartland Payment Systems has been 468,300 shares per day over the past 30 days. Heartland Payment Systems has a market cap of $3.4 billion and is part of the services sector and diversified services industry. The stock has a beta of 0.67 and a short float of 3.4% with 1.58 days to cover. Shares are down 1.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Heartland Payment Systems as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 18.3%. Since the same quarter one year prior, revenues rose by 15.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • HEARTLAND PAYMENT SYSTEMS reported significant earnings per share improvement 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, HEARTLAND PAYMENT SYSTEMS increased its bottom line by earning $2.27 versus $0.91 in the prior year. This year, the market expects an improvement in earnings ($3.36 versus $2.27).
  • 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 214.8% when compared to the same quarter one year prior, rising from -$19.77 million to $22.71 million.
  • Net operating cash flow has increased to $49.93 million or 20.41% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -19.31%.
  • Powered by its strong earnings growth of 210.90% and other important driving factors, this stock has surged by 81.81% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.

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