TD Ameritrade (AMTD) Spotted As Roof Leaker Today

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 TD Ameritrade ( AMTD) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified TD Ameritrade as such a stock due to the following factors:

  • AMTD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $69.3 million.
  • AMTD has traded 565,327 shares today.
  • AMTD is trading at 2.27 times the normal volume for the stock at this time of day.
  • AMTD crossed below its 200-day simple moving average.

'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in AMTD with the Ticky from Trade-Ideas. See the FREE profile for AMTD NOW at Trade-Ideas

More details on AMTD:

TD Ameritrade Holding Corporation provides securities brokerage services and technology-based financial services to retail investors, traders, and independent registered investment advisors (RIAs) in the United States. The stock currently has a dividend yield of 1.5%. AMTD has a PE ratio of 22.4. Currently there are 11 analysts that rate TD Ameritrade a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for TD Ameritrade has been 2.8 million shares per day over the past 30 days. TD Ameritrade has a market cap of $17.0 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.44 and a short float of 5.7% with 4.62 days to cover. Shares are up 1.7% 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 TD Ameritrade as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and impressive record of earnings per share growth. 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 0.3%. Since the same quarter one year prior, revenues rose by 19.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Capital Markets industry and the overall market, TD AMERITRADE HOLDING CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • 45.28% is the gross profit margin for TD AMERITRADE HOLDING CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 23.80% is above that of the industry average.
  • Net operating cash flow has increased to -$266.00 million or 42.17% when compared to the same quarter last year. In addition, TD AMERITRADE HOLDING CORP has also vastly surpassed the industry average cash flow growth rate of -104.13%.
  • TD AMERITRADE HOLDING CORP has improved earnings per share by 34.6% 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, TD AMERITRADE HOLDING CORP increased its bottom line by earning $1.22 versus $1.06 in the prior year. This year, the market expects an improvement in earnings ($1.38 versus $1.22).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

null

More from Markets

Alphabet, Caterpillar, Coca-Cola and Amazon - 5 Things You Must Know

Alphabet, Caterpillar, Coca-Cola and Amazon - 5 Things You Must Know

Apple Suppliers Slide After European, Asian Chipmakers Echo Smartphone Concerns

Apple Suppliers Slide After European, Asian Chipmakers Echo Smartphone Concerns

Global Stocks Edge Higher, But Bond Yields, Oil Prices May Test Market Strength

Global Stocks Edge Higher, But Bond Yields, Oil Prices May Test Market Strength

SAP Shares Leap After Cloud Business Prompts Full-Year Guidance Upgrade

SAP Shares Leap After Cloud Business Prompts Full-Year Guidance Upgrade

Sohn Conference Briefly Distracts From Barrage of Earnings -- ICYMI

Sohn Conference Briefly Distracts From Barrage of Earnings -- ICYMI