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 Hospira ( HSP) 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 Hospira as such a stock due to the following factors:

  • HSP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $27.9 million.
  • HSP has traded 12,702 shares today.
  • HSP traded in a range 205.5% of the normal price range with a price range of $1.05.
  • HSP traded above its daily resistance level (quality: 28 days, meaning that the stock is crossing a resistance level set by the last 28 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 HSP:

Hospira, Inc. provides injectable drugs and infusion technologies to develop, manufacture, distribute, and markets products worldwide. Currently there are no analysts that rate Hospira a buy, 1 analyst rates it a sell, and 7 rate it a hold.

The average volume for Hospira has been 765,400 shares per day over the past 30 days. Hospira has a market cap of $6.6 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.91 and a short float of 3.6% with 7.45 days to cover. Shares are up 28.7% year-to-date as of the close of trading on Wednesday.

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 Hospira as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.

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 Pharmaceuticals industry. The net income increased by 72.7% when compared to the same quarter one year prior, rising from $1.10 million to $1.90 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 2.5%. Since the same quarter one year prior, revenues slightly increased by 1.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • 41.60% is the gross profit margin for HOSPIRA INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, HSP's net profit margin of 0.18% significantly trails the industry average.
  • 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. Compared to other companies in the Pharmaceuticals industry and the overall market, HOSPIRA INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to $10.90 million or 94.21% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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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