Trade-Ideas LLC identified

Masco

(

MAS

) 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 Masco as such a stock due to the following factors:

  • MAS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $162.6 million.
  • MAS has traded 728,360 shares today.
  • MAS traded in a range 213.3% of the normal price range with a price range of $1.31.
  • MAS traded above its daily resistance level (quality: 68 days, meaning that the stock is crossing a resistance level set by the last 68 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 MAS:

TST Recommends

Masco Corporation manufactures, distributes, and installs home improvement and building products worldwide. The stock currently has a dividend yield of 1.4%. MAS has a PE ratio of 12. Currently there are 7 analysts that rate Masco a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Masco has been 5.8 million shares per day over the past 30 days. Masco has a market cap of $9.5 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.31 and a short float of 3.2% with 1.78 days to cover. Shares are up 9.4% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Masco as a

buy

. The company's strengths can be seen in multiple areas, such as its solid stock price performance and revenue growth. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • Compared to its closing price of one year ago, MAS's share price has jumped by 38.42%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MAS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 3.9%. Since the same quarter one year prior, revenues slightly increased by 2.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • MASCO CORP's earnings per share declined by 11.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, MASCO CORP increased its bottom line by earning $2.36 versus $0.83 in the prior year. For the next year, the market is expecting a contraction of 51.3% in earnings ($1.15 versus $2.36).
  • The gross profit margin for MASCO CORP is currently lower than what is desirable, coming in at 34.63%. Regardless of MAS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.44% trails the industry average.
  • Net operating cash flow has declined marginally to $291.00 million or 4.59% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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