Watch Out: Barbarians At The Gate For Zions (ZION)

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 Zions ( ZION) 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 Zions as such a stock due to the following factors:

  • ZION has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $52.4 million.
  • ZION has traded 2.3 million shares today.
  • ZION traded in a range 218.4% of the normal price range with a price range of $1.05.
  • ZION traded above its daily resistance level (quality: 535 days, meaning that the stock is crossing a resistance level set by the last 535 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 ZION:

Zions Bancorporation, a financial holding company, provides banking and related services in the United States. The stock currently has a dividend yield of 0.5%. ZION has a PE ratio of 14.3. Currently there are 3 analysts that rate Zions a buy, 1 analyst rates it a sell, and 13 rate it a hold.

The average volume for Zions has been 2.0 million shares per day over the past 30 days. Zions has a market cap of $5.6 billion and is part of the financial sector and banking industry. The stock has a beta of 2.05 and a short float of 7% with 7.50 days to cover. Shares are down 1% year-to-date as of the close of trading on Friday.

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 Zions as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, attractive valuation levels, good cash flow from operations and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • Powered by its strong earnings growth of 229.41% and other important driving factors, this stock has surged by 33.66% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • ZIONS BANCORPORATION reported significant earnings per share improvement 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, ZIONS BANCORPORATION increased its bottom line by earning $0.97 versus $0.83 in the prior year. This year, the market expects an improvement in earnings ($2.36 versus $0.97).
  • Net operating cash flow has significantly increased by 191.20% to $272.47 million when compared to the same quarter last year. In addition, ZIONS BANCORPORATION has also vastly surpassed the industry average cash flow growth rate of 20.97%.
  • The gross profit margin for ZIONS BANCORPORATION is currently very high, coming in at 91.22%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, ZION's net profit margin of 18.72% significantly trails the industry average.

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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