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

InterOil Corporation

(

IOC

) 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 InterOil Corporation as such a stock due to the following factors:

  • IOC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $34.6 million.
  • IOC has traded 176,061 shares today.
  • IOC traded in a range 215.8% of the normal price range with a price range of $3.25.
  • IOC 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 IOC:

InterOil Corporation operates as an integrated oil and gas company in Papua New Guinea. The company operates in four segments: Upstream, Midstream, Downstream, and Corporate. IOC has a PE ratio of 1025.2. Currently there are 3 analysts that rate InterOil Corporation a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for InterOil Corporation has been 666,600 shares per day over the past 30 days. InterOil has a market cap of $3.1 billion and is part of the basic materials sector and energy industry. Shares are up 23.1% year-to-date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates InterOil Corporation as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, feeble growth in its earnings per share, unimpressive growth in net income, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:

  • The share price of INTEROIL CORP has not done very well: it is down 15.72% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • INTEROIL CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, INTEROIL CORP reported lower earnings of $0.02 versus $0.34 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 218.4% when compared to the same quarter one year ago, falling from $5.34 million to -$6.32 million.
  • The gross profit margin for INTEROIL CORP is currently extremely low, coming in at 9.93%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.07% trails that of the industry average.
  • Net operating cash flow has decreased to $26.14 million or 11.68% when compared to the same quarter last year. Despite a decrease in cash flow INTEROIL CORP is still fairing well by exceeding its industry average cash flow growth rate of -23.15%.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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