Watch Out: Barbarians At The Gate For Huntington Ingalls Industries (HII) - TheStreet

Trade-Ideas LLC identified

Huntington Ingalls Industries

(

HII

) 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 Huntington Ingalls Industries as such a stock due to the following factors:

  • HII has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $31.3 million.
  • HII has traded 304,630 shares today.
  • HII traded in a range 297.9% of the normal price range with a price range of $6.84.
  • HII traded above its daily resistance level (quality: 72 days, meaning that the stock is crossing a resistance level set by the last 72 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 HII:

Huntington Ingalls Industries, Inc. engages in designing, building, overhauling, and repairing ships primarily for the U.S. Navy and the U.S. Coast Guard. It operates in three segments: Ingalls Shipbuilding, Newport News Shipbuilding, and Other. The stock currently has a dividend yield of 1.4%. HII has a PE ratio of 14. Currently there is 1 analyst that rates Huntington Ingalls Industries a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for Huntington Ingalls Industries has been 314,200 shares per day over the past 30 days. Huntington Ingalls has a market cap of $5.3 billion and is part of the industrial goods sector and aerospace/defense industry. The stock has a beta of 1.26 and a short float of 0.7% with 1.23 days to cover. Shares are up 1.2% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Huntington Ingalls Industries as a

buy

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, attractive valuation levels and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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.
  • HUNTINGTON INGALLS IND INC 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, HUNTINGTON INGALLS IND INC increased its bottom line by earning $6.86 versus $5.17 in the prior year. This year, the market expects an improvement in earnings ($8.68 versus $6.86).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Aerospace & Defense industry. The net income increased by 56.0% when compared to the same quarter one year prior, rising from $100.00 million to $156.00 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to other companies in the Aerospace & Defense industry and the overall market on the basis of return on equity, HUNTINGTON INGALLS IND INC has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.

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