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
) 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 Sapient as such a stock due to the following factors:
- SAPE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $76.0 million.
- SAPE has traded 1.4 million shares today.
- SAPE traded in a range 204% of the normal price range with a price range of $0.16.
- SAPE traded above its daily resistance level (quality: 528 days, meaning that the stock is crossing a resistance level set by the last 528 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 SAPE:
Sapient Corporation provides strategy, marketing, and technology services that enable clients identify and act upon opportunities to improve their business performance. It operates in three segments: SapientNitro, Sapient Global Markets, and Sapient Government Services. SAPE has a PE ratio of 44.0. Currently there are no analysts that rate Sapient a buy, no analysts rate it a sell, and 6 rate it a hold.
The average volume for Sapient has been 2.5 million shares per day over the past 30 days. Sapient has a market cap of $3.5 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.07 and a short float of 3.1% with 1.12 days to cover. Shares are up 42.1% year-to-date as of the close of trading on Monday.
rates Sapient as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 6.6%. Since the same quarter one year prior, revenues slightly increased by 8.9%. 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.
- SAPE has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, SAPE has a quick ratio of 1.86, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has significantly increased by 57.57% to $55.26 million when compared to the same quarter last year. In addition, SAPIENT CORP has also vastly surpassed the industry average cash flow growth rate of -2.68%.
- Compared to its closing price of one year ago, SAPE's share price has jumped by 58.99%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- SAPIENT CORP's earnings per share declined by 15.8% 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, SAPIENT CORP increased its bottom line by earning $0.55 versus $0.41 in the prior year. This year, the market expects an improvement in earnings ($0.60 versus $0.55).
- You can view the full Sapient Ratings Report.