Barbarian At The Gate: Cameron International Corporation (CAM)

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 Cameron International Corporation ( CAM) 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 Cameron International Corporation as such a stock due to the following factors:

  • CAM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $151.4 million.
  • CAM has traded 1.8 million shares today.
  • CAM traded in a range 1435.9% of the normal price range with a price range of $20.22.
  • CAM traded above its daily resistance level (quality: 531 days, meaning that the stock is crossing a resistance level set by the last 531 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 CAM:

Cameron International Corporation provides flow equipment products, systems, and services worldwide. CAM has a PE ratio of 20.0. Currently there are 16 analysts that rate Cameron International Corporation a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Cameron International Corporation has been 2.6 million shares per day over the past 30 days. Cameron International has a market cap of $14.4 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.28 and a short float of 2.1% with 2.24 days to cover. Shares are up 4% year to date as of the close of trading on Friday.

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 Cameron International Corporation as a buy. 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 and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • CAM's revenue growth has slightly outpaced the industry average of 3.5%. Since the same quarter one year prior, revenues rose by 11.4%. 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.
  • The current debt-to-equity ratio, 0.31, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.28, which illustrates the ability to avoid short-term cash problems.
  • CAMERON INTERNATIONAL CORP's earnings per share declined by 18.6% 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, CAMERON INTERNATIONAL CORP increased its bottom line by earning $3.02 versus $2.09 in the prior year. This year, the market expects an improvement in earnings ($3.43 versus $3.02).
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. 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.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Energy Equipment & Services industry. The net income has decreased by 19.5% when compared to the same quarter one year ago, dropping from $174.60 million to $140.50 million.

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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