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 Owens-Corning ( OC) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Owens-Corning as such a stock due to the following factors:
- OC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $64.3 million.
- OC has traded 848,082 shares today.
- OC is trading at 1.61 times the normal volume for the stock at this time of day.
- OC crossed above its 200-day simple moving average.
'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success. EXCLUSIVE OFFER: Get the inside scoop on opportunities in OC with the Ticky from Trade-Ideas. See the FREE profile for OC NOW at Trade-Ideas More details on OC: Owens Corning produces and sells glass fiber reinforcements and other materials for composite systems; and residential and commercial building materials worldwide. It operates in two segments, Composites and Building Materials. OC has a PE ratio of 70.5. Currently there are 10 analysts that rate Owens-Corning a buy, no analysts rate it a sell, and 6 rate it a hold. The average volume for Owens-Corning has been 1.3 million shares per day over the past 30 days. Owens-Corning has a market cap of $4.6 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 2.16 and a short float of 4.1% with 2.79 days to cover. Shares are down 4.4% 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 Owens-Corning as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself. Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 3.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Net operating cash flow has increased to $175.00 million or 31.57% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 17.86%.
- The debt-to-equity ratio is somewhat low, currently at 0.60, and is less than that of the industry average, implying that there has been a relatively successful effort in the 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.
- OWENS CORNING has improved earnings per share by 16.2% 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, OWENS CORNING swung to a loss, reporting -$0.16 versus $2.23 in the prior year. This year, the market expects an improvement in earnings ($1.67 versus -$0.16).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Building Products industry average, but is greater than that of the S&P 500. The net income increased by 15.9% when compared to the same quarter one year prior, going from $44.00 million to $51.00 million.
- You can view the full Owens-Corning 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.