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 ConAgra Foods ( CAG) 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 ConAgra Foods as such a stock due to the following factors:
- CAG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $78.0 million.
- CAG has traded 8.0 million shares today.
- CAG traded in a range 255.5% of the normal price range with a price range of $0.94.
- CAG traded below its daily resistance level (quality: 41 days, meaning that the stock is crossing a resistance level set by the last 41 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 CAG with the Ticky from Trade-Ideas. See the FREE profile for CAG NOW at Trade-Ideas More details on CAG: ConAgra Foods, Inc. operates as a food company primarily in North America. The company operates through four segments: Consumer Foods, Commercial Foods, Ralcorp Food Group, and Ralcorp Frozen Bakery Products. The stock currently has a dividend yield of 3%. CAG has a PE ratio of 17.3. Currently there are 3 analysts that rate ConAgra Foods a buy, no analysts rate it a sell, and 6 rate it a hold. The average volume for ConAgra Foods has been 2.4 million shares per day over the past 30 days. ConAgra has a market cap of $13.8 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 0.47 and a short float of 1.6% with 2.67 days to cover. Shares are down 2.5% 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 ConAgra Foods as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 3.5%. Since the same quarter one year prior, revenues rose by 14.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- CONAGRA FOODS INC reported significant earnings per share improvement 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, CONAGRA FOODS INC increased its bottom line by earning $1.87 versus $1.11 in the prior year. This year, the market expects an improvement in earnings ($2.22 versus $1.87).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food Products industry. The net income increased by 95.3% when compared to the same quarter one year prior, rising from $120.00 million to $234.30 million.
- Net operating cash flow has increased to $386.60 million or 27.54% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -16.09%.
- You can view the full ConAgra Foods 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.