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 VCA Antech ( WOOF) 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 VCA Antech as such a stock due to the following factors:
- WOOF has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $30.0 million.
- WOOF has traded 317,264 shares today.
- WOOF traded in a range 228.5% of the normal price range with a price range of $1.03.
- WOOF traded above its daily resistance level (quality: 71 days, meaning that the stock is crossing a resistance level set by the last 71 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. EXCLUSIVE OFFER: Get the inside scoop on opportunities in WOOF with the Ticky from Trade-Ideas. See the FREE profile for WOOF NOW at Trade-Ideas More details on WOOF: VCA Antech, Inc. operates as an animal healthcare company in the United States and Canada. It operates through two segments, Animal Hospital and Laboratory. WOOF has a PE ratio of 52.4. Currently there are 4 analysts that rate VCA Antech a buy, 1 analyst rates it a sell, and 5 rate it a hold. The average volume for VCA Antech has been 775,600 shares per day over the past 30 days. VCA Antech has a market cap of $2.5 billion and is part of the services sector and diversified services industry. The stock has a beta of 1.61 and a short float of 3.7% with 2.31 days to cover. Shares are up 32% 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 VCA Antech as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, 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:
- WOOF's revenue growth has slightly outpaced the industry average of 5.9%. Since the same quarter one year prior, revenues slightly increased by 6.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Health Care Providers & Services industry average. The net income increased by 21.4% when compared to the same quarter one year prior, going from $34.32 million to $41.66 million.
- Net operating cash flow has significantly increased by 50.89% to $52.82 million when compared to the same quarter last year. Despite an increase in cash flow of 50.89%, VCA ANTECH INC is still growing at a significantly lower rate than the industry average of 370.73%.
- The current debt-to-equity ratio, 0.51, 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 0.92 is somewhat weak and could be cause for future problems.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 33.01% over the past year, a rise that has exceeded that of the S&P 500 Index. 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.
- You can view the full VCA Antech Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.