Trade-Ideas: FLIR Systems (FLIR) 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 FLIR Systems ( FLIR) 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 FLIR Systems as such a stock due to the following factors:

  • FLIR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $26.2 million.
  • FLIR has traded 709,491 shares today.
  • FLIR traded in a range 213.5% of the normal price range with a price range of $1.37.
  • FLIR traded above its daily resistance level (quality: 148 days, meaning that the stock is crossing a resistance level set by the last 148 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 FLIR:

FLIR Systems, Inc. designs, manufactures, and markets thermal imaging systems worldwide. The company operates in five segments: Thermal Vision & Measurement (TVM), Raymarine, Surveillance, Detection, and Integrated Systems. The stock currently has a dividend yield of 1.2%. FLIR has a PE ratio of 18.8. Currently there are 3 analysts that rate FLIR Systems a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for FLIR Systems has been 999,900 shares per day over the past 30 days. FLIR Systems has a market cap of $4.1 billion and is part of the industrial goods sector and aerospace/defense industry. The stock has a beta of 0.76 and a short float of 2.6% with 3.60 days to cover. Shares are up 5.7% 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 FLIR Systems as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • FLIR's revenue growth has slightly outpaced the industry average of 0.7%. Since the same quarter one year prior, revenues slightly increased by 7.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • FLIR's debt-to-equity ratio is very low at 0.24 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 3.07, which clearly demonstrates the ability to cover short-term cash needs.
  • 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 Electronic Equipment, Instruments & Components industry and the overall market, FLIR SYSTEMS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $52.53 million or 13.10% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -13.30%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

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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