Watch Out: Barbarians At The Gate For McGraw Hill Financial (MHFI)

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 McGraw Hill Financial ( MHFI) 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 McGraw Hill Financial as such a stock due to the following factors:

  • MHFI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $138.2 million.
  • MHFI has traded 931,471 shares today.
  • MHFI traded in a range 206.9% of the normal price range with a price range of $3.52.
  • MHFI traded above its daily resistance level (quality: 19 days, meaning that the stock is crossing a resistance level set by the last 19 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 MHFI with the Ticky from Trade-Ideas. See the FREE profile for MHFI NOW at Trade-Ideas

More details on MHFI:

McGraw Hill Financial, Inc., a financial intelligence company, provides credit ratings, benchmarks, and analytics to capital and commodity markets worldwide. The stock currently has a dividend yield of 1.6%. MHFI has a PE ratio of 25.9. Currently there are 7 analysts that rate McGraw Hill Financial a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for McGraw Hill Financial has been 1.2 million shares per day over the past 30 days. McGraw Hill Financial has a market cap of $20.6 billion and is part of the services sector and diversified services industry. The stock has a beta of 0.85 and a short float of 1.8% with 2.38 days to cover. Shares are down 4.9% year-to-date as of the close of trading on Monday.

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 McGraw Hill Financial as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, notable return on equity, reasonable valuation levels and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Powered by its strong earnings growth of 58.49% and other important driving factors, this stock has surged by 33.79% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MHFI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 13.4%. Since the same quarter one year prior, revenues slightly increased by 7.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Diversified Financial Services industry and the overall market, MCGRAW HILL FINANCIAL's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • MCGRAW HILL FINANCIAL reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MCGRAW HILL FINANCIAL reported lower earnings of $2.38 versus $2.75 in the prior year. This year, the market expects an improvement in earnings ($3.31 versus $2.38).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
null

If you liked this article you might like

3 Stocks Boosting The Diversified Services Industry Higher

McGraw Hill Continues to Focus on Returning Capital to Shareholders

McGraw Hill Sells J.D. Power Unit to XIO Group for $1.1B

3 Stocks Raising The Diversified Services Industry Higher

'Mad Money' Lightning Round: I'm a Palo Alto Networks Guy