Watch Out: Barbarians At The Gate For Symantec (SYMC)

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 Symantec ( SYMC) 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 Symantec as such a stock due to the following factors:

  • SYMC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $126.0 million.
  • SYMC has traded 367,144 shares today.
  • SYMC traded in a range 221.4% of the normal price range with a price range of $0.84.
  • SYMC traded above its daily resistance level (quality: 288 days, meaning that the stock is crossing a resistance level set by the last 288 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.

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More details on SYMC:

Symantec Corporation, together with its subsidiaries, provides security, backup, and availability solutions worldwide. Its products and services protect people and information in any environment from mobile devices and enterprise data centers to cloud-based systems. The stock currently has a dividend yield of 2.5%. SYMC has a PE ratio of 18.4. Currently there are 4 analysts that rate Symantec a buy, 2 analysts rate it a sell, and 11 rate it a hold.

The average volume for Symantec has been 6.0 million shares per day over the past 30 days. Symantec has a market cap of $16.3 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.11 and a short float of 1.8% with 2.37 days to cover. Shares are down 0.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Symantec as a buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, attractive valuation levels, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • SYMANTEC CORP has improved earnings per share by 14.8% 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, SYMANTEC CORP increased its bottom line by earning $1.27 versus $1.06 in the prior year. This year, the market expects an improvement in earnings ($1.88 versus $1.27).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Software industry average. The net income increased by 14.2% when compared to the same quarter one year prior, going from $190.00 million to $217.00 million.
  • The gross profit margin for SYMANTEC CORP is currently very high, coming in at 88.18%. 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 13.15% trails the industry average.
  • 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 Software industry and the overall market on the basis of return on equity, SYMANTEC CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.

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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