Informatica Corporation (INFA) Is Today's Water-Logged And Getting Wetter Stock

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 Informatica Corporation ( INFA) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Informatica Corporation as such a stock due to the following factors:

  • INFA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $49.3 million.
  • INFA has traded 252,298 shares today.
  • INFA traded in a range 256.2% of the normal price range with a price range of $2.22.
  • INFA traded below its daily resistance level (quality: 34 days, meaning that the stock is crossing a resistance level set by the last 34 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on INFA:

Informatica Corporation provides enterprise data integration and data quality software and services worldwide. INFA has a PE ratio of 62.1. Currently there are 10 analysts that rate Informatica Corporation a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for Informatica Corporation has been 812,200 shares per day over the past 30 days. Informatica has a market cap of $4.7 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.74 and a short float of 2.6% with 2.26 days to cover. Shares are up 3.4% year-to-date as of the close of trading on Thursday.

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 Informatica Corporation as a hold. 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 and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 3.1%. Since the same quarter one year prior, revenues rose by 23.7%. 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.
  • INFA has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, INFA has a quick ratio of 2.06, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Compared to its closing price of one year ago, INFA's share price has jumped by 33.96%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Software industry and the overall market, INFORMATICA CORP's return on equity is below that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $29.80 million or 30.43% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly 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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