Trade-Ideas: Northern (NTRS) 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 Northern ( NTRS) 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 Northern as such a stock due to the following factors:

  • NTRS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $65.5 million.
  • NTRS has traded 185,149 shares today.
  • NTRS traded in a range 284.3% of the normal price range with a price range of $2.53.
  • NTRS traded above its daily resistance level (quality: 3 days, meaning that the stock is crossing a resistance level set by the last 3 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 NTRS:

Northern Trust Corporation, through its subsidiaries, provides investment management, asset and fund administration, banking solutions, and fiduciary services for corporations, institutions, and affluent individuals worldwide. The stock currently has a dividend yield of 1.9%. NTRS has a PE ratio of 22.2. Currently there is 1 analyst that rates Northern a buy, 4 analysts rate it a sell, and 7 rate it a hold.

The average volume for Northern has been 1.2 million shares per day over the past 30 days. Northern has a market cap of $15.9 billion and is part of the financial sector and financial services industry. The stock has a beta of 0.97 and a short float of 1.4% with 3.06 days to cover. Shares are up 9.4% 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 Northern as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • NTRS's revenue growth has slightly outpaced the industry average of 0.6%. Since the same quarter one year prior, revenues slightly increased by 5.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • NORTHERN TRUST CORP reported flat earnings per share in the most recent quarter. 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, NORTHERN TRUST CORP increased its bottom line by earning $2.99 versus $2.81 in the prior year. This year, the market expects an improvement in earnings ($3.28 versus $2.99).
  • The gross profit margin for NORTHERN TRUST CORP is currently very high, coming in at 96.04%. 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 18.20% 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. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • Net operating cash flow has significantly decreased to -$266.50 million or 111.88% when compared to the same quarter last year. Despite a decrease in cash flow of 111.88%, NORTHERN TRUST CORP is still significantly exceeding the industry average of -171.57%.

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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