Trade-Ideas: Sensata Technologies Holding N.V (ST) Is Today's

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 Sensata Technologies Holding N.V ( ST) 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 Sensata Technologies Holding N.V as such a stock due to the following factors:

  • ST has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $30.9 million.
  • ST has traded 1.5 million shares today.
  • ST traded in a range 248.2% of the normal price range with a price range of $1.74.
  • ST traded above its daily resistance level (quality: 26 days, meaning that the stock is crossing a resistance level set by the last 26 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 ST:

Sensata Technologies Holding N.V, through its subsidiaries, engages in the development, manufacture, and sale of sensors and controls primarily in the Americas, the Asia Pacific, and Europe. The company operates in two segments, Sensors and Controls. ST has a PE ratio of 30.9. Currently there are 7 analysts that rate Sensata Technologies Holding N.V a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Sensata Technologies Holding N.V has been 924,800 shares per day over the past 30 days. Sensata Technologies Holding N.V has a market cap of $7.8 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.22 and a short float of 1.6% with 7.10 days to cover. Shares are up 19.1% year-to-date as of the close of trading on Friday.

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 Sensata Technologies Holding N.V 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. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues rose by 13.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SENSATA TECHNOLOGIES HLDG NV reported significant earnings per share improvement 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, SENSATA TECHNOLOGIES HLDG NV increased its bottom line by earning $1.05 versus $0.97 in the prior year. This year, the market expects an improvement in earnings ($2.44 versus $1.05).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electrical Equipment industry. The net income increased by 213.6% when compared to the same quarter one year prior, rising from $20.37 million to $63.89 million.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Electrical Equipment industry and the overall market, SENSATA TECHNOLOGIES HLDG NV's return on equity exceeds that of both the industry average and the S&P 500.
  • 38.55% is the gross profit margin for SENSATA TECHNOLOGIES HLDG NV which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 11.09% is above that of the industry average.

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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