ARRIS Group (ARRS) Is Water-Logged And Getting Wetter 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 ARRIS Group ( ARRS) 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 ARRIS Group as such a stock due to the following factors:

  • ARRS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $39.5 million.
  • ARRS has traded 363,660 shares today.
  • ARRS traded in a range 202.7% of the normal price range with a price range of $1.39.
  • ARRS traded below its daily resistance level (quality: 31 days, meaning that the stock is crossing a resistance level set by the last 31 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 ARRS:

ARRIS Group, Inc. provides media entertainment and data communications solutions in the United States and internationally. The company operates in two segments, Customer Premises Equipment and Network & Cloud. ARRS has a PE ratio of 44.9. Currently there are 6 analysts that rate ARRIS Group a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for ARRIS Group has been 2.5 million shares per day over the past 30 days. ARRIS Group has a market cap of $4.5 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 0.51 and a short float of 2.3% with 2.84 days to cover. Shares are up 29.5% 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 ARRIS Group as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, solid stock price performance, impressive record of earnings per share growth and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 3.3%. Since the same quarter one year prior, revenues rose by 42.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 180.5% when compared to the same quarter one year prior, rising from -$48.46 million to $39.02 million.
  • Powered by its strong earnings growth of 172.22% and other important driving factors, this stock has surged by 92.62% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • ARRIS GROUP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ARRIS GROUP INC swung to a loss, reporting -$0.39 versus $0.46 in the prior year. This year, the market expects an improvement in earnings ($2.52 versus -$0.39).
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Communications Equipment industry and the overall market, ARRIS GROUP INC's return on equity is below that of both the industry average and 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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