Trade-Ideas LLC identified

JM Smucker

(

SJM

) 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 JM Smucker as such a stock due to the following factors:

  • SJM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $97.5 million.
  • SJM has traded 166,280 shares today.
  • SJM traded in a range 201% of the normal price range with a price range of $4.13.
  • SJM traded above its daily resistance level (quality: 176 days, meaning that the stock is crossing a resistance level set by the last 176 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 SJM:

The J. M. Smucker Company manufactures and markets branded food products worldwide. It operates through four segments: U.S. Retail Coffee; U.S. Retail Consumer Foods; U.S. Retail Pet Foods; and International, Foodservice, and Natural Foods. The stock currently has a dividend yield of 2.4%. SJM has a PE ratio of 34. Currently there are 3 analysts that rate JM Smucker a buy, no analysts rate it a sell, and 9 rate it a hold.

The average volume for JM Smucker has been 1.1 million shares per day over the past 30 days. JM Smucker has a market cap of $13.4 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 0.76 and a short float of 4.5% with 5.47 days to cover. Shares are up 12.3% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates JM Smucker as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins, increase in net income and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 5.2%. Since the same quarter one year prior, revenues rose by 47.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • Net operating cash flow has significantly increased by 3866.66% to $305.10 million when compared to the same quarter last year. In addition, SMUCKER (JM) CO has also vastly surpassed the industry average cash flow growth rate of -23.54%.
  • 40.34% is the gross profit margin for SMUCKER (JM) CO which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.98% trails the industry average.
  • SMUCKER (JM) CO reported flat earnings per share in the most recent quarter. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, SMUCKER (JM) CO reported lower earnings of $3.45 versus $5.40 in the prior year. This year, the market expects an improvement in earnings ($5.75 versus $3.45).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Food Products industry average, but is greater than that of the S&P 500. The net income increased by 17.6% when compared to the same quarter one year prior, going from $116.00 million to $136.40 million.

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