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 Wabco Holdings as such a stock due to the following factors:
- WBC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $54.5 million.
- WBC has traded 72,192 shares today.
- WBC traded in a range 204.4% of the normal price range with a price range of $4.20.
- WBC traded above its daily resistance level (quality: 219 days, meaning that the stock is crossing a resistance level set by the last 219 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 WBC:
WABCO Holdings Inc., together with its subsidiaries, provides electronic, mechanical, and mechatronic products for commercial truck, trailer, bus, and passenger car manufacturers worldwide. WBC has a PE ratio of 9.9. Currently there are 6 analysts that rate Wabco Holdings a buy, no analysts rate it a sell, and 3 rate it a hold.
The average volume for Wabco Holdings has been 433,500 shares per day over the past 30 days. Wabco has a market cap of $6.0 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 1.87 and a short float of 2% with 2.33 days to cover. Shares are down 1.6% year-to-date as of the close of trading on Thursday.
rates Wabco Holdings 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, notable return on equity, increase in stock price during the past year and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- WBC's revenue growth has slightly outpaced the industry average of 1.3%. Since the same quarter one year prior, revenues slightly increased by 4.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- WBC's debt-to-equity ratio is very low at 0.28 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, WBC has a quick ratio of 1.99, which demonstrates the ability of the company to cover short-term liquidity needs.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Machinery industry and the overall market, WABCO HOLDINGS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The net income growth from the same quarter one year ago has exceeded that of the Machinery industry average, but is less than that of the S&P 500. The net income increased by 2.5% when compared to the same quarter one year prior, going from $80.00 million to $82.00 million.
- You can view the full Wabco Holdings Ratings Report.