Watch Out: Barbarians At The Gate For Citigroup (C)

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 Citigroup ( C) 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 Citigroup as such a stock due to the following factors:

  • C has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $968.5 million.
  • C has traded 5.2 million shares today.
  • C traded in a range 211.2% of the normal price range with a price range of $1.27.
  • C traded above its daily resistance level (quality: 8 days, meaning that the stock is crossing a resistance level set by the last 8 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 C:

Citigroup, Inc., a diversified financial services holding company, provides a range of financial products and services to consumers, corporations, governments, and institutions worldwide. The company operates through two segments, Citicorp and Citi Holdings. The stock currently has a dividend yield of 0.1%. C has a PE ratio of 12.2. Currently there are 17 analysts that rate Citigroup a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Citigroup has been 23.2 million shares per day over the past 30 days. Citigroup has a market cap of $147.5 billion and is part of the financial sector and banking industry. The stock has a beta of 2.27 and a short float of 1.1% with 1.68 days to cover. Shares are up 22.9% year to date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Citigroup as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, notable return on equity, attractive valuation levels and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • Compared to where it was trading one year ago, C is up 30.46% to its most recent closing price of 48.78. Looking ahead, although the push and pull of a bull or bear market could certainly alter the outcome, our view is that this stock's positive fundamentals give it good potential for further appreciation.
  • The net income increased by 589.5% when compared to the same quarter one year prior, rising from $468.00 million to $3,227.00 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization.
  • Since the same quarter one year prior, revenues slightly dropped by 7.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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