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 Compuware Corporation ( CPWR) 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 Compuware Corporation as such a stock due to the following factors:
- CPWR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $32.2 million.
- CPWR has traded 1.6 million shares today.
- CPWR traded in a range 214.1% of the normal price range with a price range of $0.38.
- CPWR traded above its daily resistance level (quality: 36 days, meaning that the stock is crossing a resistance level set by the last 36 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 CPWR with the Ticky from Trade-Ideas. See the FREE profile for CPWR NOW at Trade-Ideas More details on CPWR: Compuware Corporation provides services, software, and practices for information technology (IT) organizations worldwide. The stock currently has a dividend yield of 4.8%. Currently there are 2 analysts that rate Compuware Corporation a buy, no analysts rate it a sell, and 2 rate it a hold. The average volume for Compuware Corporation has been 2.2 million shares per day over the past 30 days. Compuware has a market cap of $2.3 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.18 and a short float of 0.7% with 0.61 days to cover. Shares are down 4% year to date as of the close of trading on Tuesday. 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 Compuware Corporation as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and good cash flow from operations. However, as a counter to these strengths, we find that the company's return on equity has been disappointing. Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 54.2% when compared to the same quarter one year prior, rising from $10.59 million to $16.34 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 7.1%. Since the same quarter one year prior, revenues slightly increased by 3.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- The gross profit margin for COMPUWARE CORP is rather high; currently it is at 66.13%. Regardless of CPWR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CPWR's net profit margin of 7.16% is significantly lower than the industry average.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Software industry and the overall market, COMPUWARE CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full Compuware Corporation 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.