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 Signature Bank ( SBNY) 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 Signature Bank as such a stock due to the following factors:

  • SBNY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $42.0 million.
  • SBNY has traded 57,505 shares today.
  • SBNY traded in a range 329.5% of the normal price range with a price range of $7.42.
  • SBNY traded below its daily resistance level (quality: 48 days, meaning that the stock is crossing a resistance level set by the last 48 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.

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More details on SBNY:

Signature Bank provides various business and personal banking products and services. SBNY has a PE ratio of 24.0. Currently there are 12 analysts that rate Signature Bank a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Signature Bank has been 386,600 shares per day over the past 30 days. Signature has a market cap of $5.8 billion and is part of the financial sector and banking industry. Shares are up 12.8% year-to-date as of the close of trading on Monday.

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 Signature Bank as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.1%. Since the same quarter one year prior, revenues rose by 22.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SIGNATURE BANK/NY has improved earnings per share by 29.2% 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, SIGNATURE BANK/NY increased its bottom line by earning $4.77 versus $3.91 in the prior year. This year, the market expects an improvement in earnings ($5.77 versus $4.77).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 30.4% when compared to the same quarter one year prior, rising from $50.63 million to $66.01 million.
  • The gross profit margin for SIGNATURE BANK/NY is currently very high, coming in at 83.18%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 29.60% is above that of the industry average.
  • Net operating cash flow has significantly increased by 75.94% to $80.77 million when compared to the same quarter last year. In addition, SIGNATURE BANK/NY has also vastly surpassed the industry average cash flow growth rate of -98.56%.

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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