Barbarian At The Gate: Mettler-Toledo International (MTD)

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 Mettler-Toledo International ( MTD) 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 Mettler-Toledo International as such a stock due to the following factors:

  • MTD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $46.1 million.
  • MTD has traded 57,225 shares today.
  • MTD traded in a range 235.3% of the normal price range with a price range of $10.99.
  • MTD traded above its daily resistance level (quality: 56 days, meaning that the stock is crossing a resistance level set by the last 56 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 MTD:

Mettler-Toledo International Inc. supplies precision instruments and services worldwide. The company operates in five segments: U.S. Operations, Swiss Operations, Western European Operations, Chinese Operations, and Other. MTD has a PE ratio of 23.8. Currently there are 3 analysts that rate Mettler-Toledo International a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Mettler-Toledo International has been 168,900 shares per day over the past 30 days. Mettler-Toledo International has a market cap of $6.9 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.16 and a short float of 3.2% with 4.35 days to cover. Shares are down 2.8% 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 Mettler-Toledo International as a buy. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, growth in earnings per share, revenue growth, largely solid financial position with reasonable debt levels by most measures 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 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.
  • METTLER-TOLEDO INTL INC has improved earnings per share by 8.3% 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, METTLER-TOLEDO INTL INC increased its bottom line by earning $9.99 versus $9.18 in the prior year. This year, the market expects an improvement in earnings ($11.60 versus $9.99).
  • MTD's revenue growth trails the industry average of 17.1%. Since the same quarter one year prior, revenues slightly increased by 4.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.44, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.03, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for METTLER-TOLEDO INTL INC is rather high; currently it is at 56.14%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 16.09% 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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