State Street (STT) Flagged As A 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 $134.8 million.
  • STT has traded 383,726 shares today.
  • STT is trading at 2.69 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 1.8%. STT has a PE ratio of 15.1. Currently there are 9 analysts that rate State Street a buy, 2 analysts rate it a sell, and 6 rate it a hold.

The average volume for State Street has been 2.5 million shares per day over the past 30 days. State Street has a market cap of $29.0 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.73 and a short float of 1.1% with 2.28 days to cover. Shares are down 7.8% 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 State Street as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • STT's revenue growth has slightly outpaced the industry average of 5.2%. Since the same quarter one year prior, revenues slightly increased by 1.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 1623.00% to $1,947.00 million when compared to the same quarter last year. In addition, STATE STREET CORP has also vastly surpassed the industry average cash flow growth rate of 14.98%.
  • The gross profit margin for STATE STREET CORP is currently very high, coming in at 96.05%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 14.04% trails the industry average.
  • STATE STREET CORP's earnings per share declined by 17.3% 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, 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 ($4.79 versus $4.61).

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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