Trade-Ideas: Interpublic Group Of Cos (IPG) Is Today's

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 Interpublic Group of Cos ( IPG) 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 Interpublic Group of Cos as such a stock due to the following factors:

  • IPG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $46.4 million.
  • IPG has traded 1.5 million shares today.
  • IPG traded in a range 210.9% of the normal price range with a price range of $0.57.
  • IPG traded above its daily resistance level (quality: 7 days, meaning that the stock is crossing a resistance level set by the last 7 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 IPG:

The Interpublic Group of Companies, Inc., through its subsidiaries, provides advertising and marketing services worldwide. The company operates in two segments, Integrated Agency Networks and Constituency Management Group. The stock currently has a dividend yield of 1.9%. IPG has a PE ratio of 18.4. Currently there are 10 analysts that rate Interpublic Group of Cos a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Interpublic Group of Cos has been 4.4 million shares per day over the past 30 days. Interpublic Group of Cos has a market cap of $6.8 billion and is part of the services sector and media industry. The stock has a beta of 2.03 and a short float of 2.7% with 4.18 days to cover. Shares are up 42.1% year to date as of the close of trading on Wednesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Interpublic Group of Cos as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:
  • IPG's revenue growth has slightly outpaced the industry average of 2.4%. Since the same quarter one year prior, revenues slightly increased by 2.4%. 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.
  • Compared to its closing price of one year ago, IPG's share price has jumped by 44.66%, 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, IPG should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has increased to $183.70 million or 16.33% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -15.84%.
  • The debt-to-equity ratio is somewhat low, currently at 0.96, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 1.00 is somewhat weak and could be cause for future problems.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Media industry and the overall market, INTERPUBLIC GROUP OF COS's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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