State Street (STT) Is Today's Storm The Castle 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 State Street ( STT) 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 State Street as such a stock due to the following factors:

  • STT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $184.8 million.
  • STT has traded 4.9 million shares today.
  • STT is trading at 2.20 times the normal volume for the stock at this time of day.
  • STT 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.

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More details on STT:

State Street Corporation provides various financial services and products to institutional investors worldwide. The stock currently has a dividend yield of 1.6%. STT has a PE ratio of 14.1. Currently there are 9 analysts that rate State Street a buy, 2 analysts rate it a sell, and 5 rate it a hold.

The average volume for State Street has been 2.6 million shares per day over the past 30 days. State Street has a market cap of $28.6 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.72 and a short float of 0.8% with 1.31 days to cover. Shares are down 7.3% 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 State Street as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 16.6%. Since the same quarter one year prior, revenues slightly increased by 0.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • STATE STREET CORP has improved earnings per share by 22.0% 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 two years. We feel that this trend should continue. During the past fiscal year, STATE STREET CORP increased its bottom line by earning $4.61 versus $4.19 in the prior year. This year, the market expects an improvement in earnings ($5.02 versus $4.61).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Capital Markets industry average. The net income increased by 17.6% when compared to the same quarter one year prior, going from $470.00 million to $553.00 million.
  • The gross profit margin for STATE STREET CORP is currently very high, coming in at 95.90%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 21.57% 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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