Trade-Ideas LLC identified
) 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 KB Home as such a stock due to the following factors:
- KBH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $32.7 million.
- KBH has traded 3.7 million shares today.
- KBH traded in a range 267.7% of the normal price range with a price range of $0.88.
- KBH traded above its daily resistance level (quality: 21 days, meaning that the stock is crossing a resistance level set by the last 21 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 KBH:
KB Home operates as a homebuilding company in the United States. It constructs and sells various homes, including attached and detached single-family residential homes, townhomes, and condominiums primarily for first-time, move-up, and active adult homebuyers. The stock currently has a dividend yield of 0.8%. KBH has a PE ratio of 14. Currently there is 1 analyst that rates KB Home a buy, 2 analysts rate it a sell, and 11 rate it a hold.
The average volume for KB Home has been 3.3 million shares per day over the past 30 days. KB Home has a market cap of $1.1 billion and is part of the industrial goods sector and materials & construction industry. Shares are up 3.2% year-to-date as of the close of trading on Monday.
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rates KB Home as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels and increase in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, disappointing return on equity and weak operating cash flow.
Highlights from the ratings report include:
- KBH's revenue growth has slightly outpaced the industry average of 7.6%. Since the same quarter one year prior, revenues rose by 16.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- KB HOME reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, KB HOME reported lower earnings of $0.84 versus $9.03 in the prior year. This year, the market expects an improvement in earnings ($1.31 versus $0.84).
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. In comparison to the other companies in the Household Durables industry and the overall market, KB HOME's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- Net operating cash flow has significantly decreased to -$143.31 million or 193.01% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full KB Home Ratings Report.