Watch Out: Barbarians At The Gate For National Fuel Gas Company (NFG)

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 National Fuel Gas Company ( NFG) 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 National Fuel Gas Company as such a stock due to the following factors:

  • NFG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $31.8 million.
  • NFG has traded 321,903 shares today.
  • NFG traded in a range 214.1% of the normal price range with a price range of $2.12.
  • NFG traded above its daily resistance level (quality: 14 days, meaning that the stock is crossing a resistance level set by the last 14 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 NFG:

National Fuel Gas Company operates as a diversified energy company in the United States. The stock currently has a dividend yield of 2%. NFG has a PE ratio of 22.6. Currently there are 2 analysts that rate National Fuel Gas Company a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for National Fuel Gas Company has been 448,000 shares per day over the past 30 days. National Fuel Gas has a market cap of $6.1 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.54 and a short float of 3.7% with 6.41 days to cover. Shares are up 2.7% 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 National Fuel Gas Company as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • NFG's revenue growth has slightly outpaced the industry average of 16.0%. Since the same quarter one year prior, revenues rose by 21.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • NATIONAL FUEL GAS CO has improved earnings per share by 19.8% 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 year. We feel that this trend should continue. During the past fiscal year, NATIONAL FUEL GAS CO increased its bottom line by earning $3.09 versus $2.64 in the prior year. This year, the market expects an improvement in earnings ($3.35 versus $3.09).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Gas Utilities industry average. The net income increased by 21.1% when compared to the same quarter one year prior, going from $67.94 million to $82.25 million.
  • 46.12% is the gross profit margin for NATIONAL FUEL GAS CO which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 14.95% is above that of 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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