Vantiv (VNTV) Highlighted As Storm The Castle Stock

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 Vantiv ( VNTV) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Vantiv as such a stock due to the following factors:

  • VNTV has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $56.0 million.
  • VNTV has traded 472,145 shares today.
  • VNTV is trading at 2.59 times the normal volume for the stock at this time of day.
  • VNTV crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on VNTV:

Vantiv, Inc. provides electronic integrated payment processing services in the United States. It operates in two segments, Merchant Services and Financial Institution Services. VNTV has a PE ratio of 47.5. Currently there are 11 analysts that rate Vantiv a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Vantiv has been 1.5 million shares per day over the past 30 days. Vantiv has a market cap of $4.5 billion and is part of the services sector and diversified services industry. The stock has a beta of 0.45 and a short float of 7.2% with 2.84 days to cover. Shares are down 4.5% year-to-date as of the close of trading on Thursday.

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 Vantiv as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 6.8%. Since the same quarter one year prior, revenues rose by 30.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 382.84% to $206.34 million when compared to the same quarter last year. In addition, VANTIV INC has also vastly surpassed the industry average cash flow growth rate of -3.22%.
  • VANTIV INC's earnings per share declined by 16.7% 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, VANTIV INC increased its bottom line by earning $0.88 versus $0.45 in the prior year. This year, the market expects an improvement in earnings ($1.86 versus $0.88).
  • 46.27% is the gross profit margin for VANTIV INC which we consider to be strong. Regardless of VNTV's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.30% trails the industry average.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, the stock's 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 the other strengths this company displays justify these higher price levels.

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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