Trade-Ideas LLC identified

Molson Coors Brewing

(

TAP

) 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 Molson Coors Brewing as such a stock due to the following factors:

  • TAP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $225.0 million.
  • TAP has traded 1.3 million shares today.
  • TAP traded in a range 203.2% of the normal price range with a price range of $4.42.
  • TAP traded above its daily resistance level (quality: 4 days, meaning that the stock is crossing a resistance level set by the last 4 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 TAP:

TST Recommends

Molson Coors Brewing Company manufactures and sells beer and other beverage products. The stock currently has a dividend yield of 1.9%. TAP has a PE ratio of 27. Currently there are 4 analysts that rate Molson Coors Brewing a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Molson Coors Brewing has been 2.1 million shares per day over the past 30 days. Molson Coors Brewing has a market cap of $15.7 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 0.79 and a short float of 2.4% with 1.46 days to cover. Shares are down 6.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Molson Coors Brewing as a

buy

. The company's strengths can be seen in multiple areas, such as its increase in net income, solid stock price performance, growth in earnings per share, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Beverages industry. The net income increased by 148.3% when compared to the same quarter one year prior, rising from -$34.40 million to $16.60 million.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • MOLSON COORS BREWING CO 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, MOLSON COORS BREWING CO reported lower earnings of $2.75 versus $3.06 in the prior year. This year, the market expects an improvement in earnings ($3.82 versus $2.75).
  • The current debt-to-equity ratio, 0.41, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.71 is somewhat weak and could be cause for future problems.
  • 48.23% is the gross profit margin for MOLSON COORS BREWING CO which we consider to be strong. Regardless of TAP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.63% trails the industry average.

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