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 TRW Automotive Holdings ( TRW) 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 TRW Automotive Holdings as such a stock due to the following factors:
- TRW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $116.0 million.
- TRW has traded 345,750 shares today.
- TRW traded in a range 202.5% of the normal price range with a price range of $2.53.
- TRW traded above its daily resistance level (quality: 530 days, meaning that the stock is crossing a resistance level set by the last 530 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. EXCLUSIVE OFFER: Get the inside scoop on opportunities in TRW with the Ticky from Trade-Ideas. See the FREE profile for TRW NOW at Trade-Ideas More details on TRW: TRW Automotive Holdings Corp., together with its subsidiaries, supplies automotive systems, modules, and components to automotive original equipment manufacturers (OEMs) and related aftermarkets. TRW has a PE ratio of 11.1. Currently there are 5 analysts that rate TRW Automotive Holdings a buy, no analysts rate it a sell, and 4 rate it a hold. The average volume for TRW Automotive Holdings has been 840,400 shares per day over the past 30 days. TRW Automotive has a market cap of $10.1 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 2.29 and a short float of 6.5% with 5.54 days to cover. Shares are up 22.9% year-to-date as of the close of trading on Wednesday. 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 TRW Automotive Holdings as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, increase in net income, attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow. Highlights from the ratings report include:
- TRW's revenue growth has slightly outpaced the industry average of 3.4%. Since the same quarter one year prior, revenues slightly increased by 5.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 30.23% and other important driving factors, this stock has surged by 35.17% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TRW should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the Auto Components industry average, but is less than that of the S&P 500. The net income increased by 22.8% when compared to the same quarter one year prior, going from $162.00 million to $199.00 million.
- The current debt-to-equity ratio, 0.47, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.81 is somewhat weak and could be cause for future problems.
- You can view the full TRW Automotive Holdings 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.