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 Spirit AeroSystems Holdings ( SPR) 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 Spirit AeroSystems Holdings as such a stock due to the following factors:
- SPR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $35.7 million.
- SPR has traded 51,722 shares today.
- SPR traded in a range 226.1% of the normal price range with a price range of $1.95.
- SPR traded below its daily resistance level (quality: 96 days, meaning that the stock is crossing a resistance level set by the last 96 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. EXCLUSIVE OFFER: Get the inside scoop on opportunities in SPR with the Ticky from Trade-Ideas. See the FREE profile for SPR NOW at Trade-Ideas More details on SPR: Spirit AeroSystems Holdings, Inc., through its subsidiaries, operates as a non-original equipment manufacturer (OEM) that designs and manufactures commercial aerostructures worldwide. It operates in three segments: Fuselage Systems, Propulsion Systems, and Wing Systems. SPR has a PE ratio of 180.9. Currently there are 8 analysts that rate Spirit AeroSystems Holdings a buy, no analysts rate it a sell, and 6 rate it a hold. The average volume for Spirit AeroSystems Holdings has been 1.2 million shares per day over the past 30 days. Spirit AeroSystems has a market cap of $3.9 billion and is part of the industrial goods sector and aerospace/defense industry. The stock has a beta of 1.53 and a short float of 1.2% with 0.85 days to cover. Shares are down 3.5% 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 Spirit AeroSystems Holdings as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity. Highlights from the ratings report include:
- SPR's revenue growth has slightly outpaced the industry average of 8.3%. Since the same quarter one year prior, revenues rose by 10.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Aerospace & Defense industry. The net income increased by 169.7% when compared to the same quarter one year prior, rising from -$134.40 million to $93.70 million.
- Net operating cash flow has significantly increased by 80.13% to $185.00 million when compared to the same quarter last year. In addition, SPIRIT AEROSYSTEMS HOLDINGS has also vastly surpassed the industry average cash flow growth rate of -9.48%.
- The current debt-to-equity ratio, 0.59, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.85 is somewhat weak and could be cause for future problems.
- Powered by its strong earnings growth of 169.14% and other important driving factors, this stock has surged by 112.14% 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 Spirit AeroSystems Holdings 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.