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 Gentex Corporation ( GNTX) 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 Gentex Corporation as such a stock due to the following factors:
- GNTX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $23.9 million.
- GNTX has traded 1.5 million shares today.
- GNTX traded in a range 227% of the normal price range with a price range of $1.10.
- GNTX traded above its daily resistance level (quality: 47 days, meaning that the stock is crossing a resistance level set by the last 47 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 GNTX with the Ticky from Trade-Ideas. See the FREE profile for GNTX NOW at Trade-Ideas More details on GNTX: Gentex Corporation designs, develops, manufactures, and markets electro-optical products for the automotive, commercial building, and aircraft industries primarily in the United States, Germany, and Japan. The stock currently has a dividend yield of 1.9%. GNTX has a PE ratio of 22.0. Currently there are 2 analysts that rate Gentex Corporation a buy, 2 analysts rate it a sell, and 6 rate it a hold. The average volume for Gentex Corporation has been 1.0 million shares per day over the past 30 days. Gentex has a market cap of $4.3 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 1.41 and a short float of 4% with 6.28 days to cover. Shares are up 56.6% 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 Gentex Corporation as a buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow. Highlights from the ratings report include:
- GENTEX CORP has improved earnings per share by 31.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, GENTEX CORP increased its bottom line by earning $1.17 versus $1.14 in the prior year. This year, the market expects an improvement in earnings ($1.50 versus $1.17).
- Despite its growing revenue, the company underperformed as compared with the industry average of 11.6%. Since the same quarter one year prior, revenues slightly increased by 7.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- GNTX's debt-to-equity ratio is very low at 0.21 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.14, which clearly demonstrates the ability to cover short-term cash needs.
- 41.83% is the gross profit margin for GENTEX CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.23% significantly outperformed against the industry average.
- Powered by its strong earnings growth of 31.03% and other important driving factors, this stock has surged by 65.01% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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 Gentex 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.