Trade-Ideas: Moody's Corporation (MCO) 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 Moody's Corporation ( MCO) 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 Moody's Corporation as such a stock due to the following factors:

  • MCO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $59.3 million.
  • MCO has traded 701,263 shares today.
  • MCO traded in a range 232.1% of the normal price range with a price range of $3.92.
  • MCO traded above its daily resistance level (quality: 530 days, meaning that the stock is crossing a resistance level set by the last 530 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 MCO:

Moody's Corporation provides credit ratings; and credit, capital markets, and economic related research, data, and analytical tools worldwide. The stock currently has a dividend yield of 1.4%. MCO has a PE ratio of 21.8. Currently there are 4 analysts that rate Moody's Corporation a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Moody's Corporation has been 960,300 shares per day over the past 30 days. The stock has a beta of 1.43 and a short float of 3.7% with 9.81 days to cover. Shares are up 44.7% 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 Moody's Corporation as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, solid stock price performance, notable return on equity and reasonable valuation levels. 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:
  • Since the same quarter one year prior, revenues slightly increased by 2.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has slightly increased to $284.40 million or 9.17% when compared to the same quarter last year.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation.
  • Compared to where it was trading one year ago, MCO is up 54.26% to its most recent closing price of 71.38. 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.

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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