Barbarian At The Gate: FLIR Systems (FLIR)

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 FLIR Systems ( FLIR) 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 FLIR Systems as such a stock due to the following factors:

  • FLIR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $32.7 million.
  • FLIR has traded 752,824 shares today.
  • FLIR traded in a range 220.1% of the normal price range with a price range of $1.22.
  • FLIR traded above its daily resistance level (quality: 25 days, meaning that the stock is crossing a resistance level set by the last 25 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 FLIR:

FLIR Systems, Inc. designs, manufactures, and markets thermal imaging, and other sensing products and systems worldwide. The company operates in five segments: Thermal Vision & Measurement (TVM), Raymarine, Surveillance, Detection, and Integrated Systems. The stock currently has a dividend yield of 1.3%. FLIR has a PE ratio of 29.2. Currently there are 5 analysts that rate FLIR Systems a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for FLIR Systems has been 791,600 shares per day over the past 30 days. FLIR Systems has a market cap of $4.5 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.56 and a short float of 2.8% with 3.50 days to cover. Shares are up 4.5% 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 FLIR Systems as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • FLIR's revenue growth has slightly outpaced the industry average of 1.8%. Since the same quarter one year prior, revenues slightly increased by 4.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • FLIR's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.00, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for FLIR SYSTEMS INC is rather high; currently it is at 52.74%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 14.08% is above that of the industry average.
  • FLIR SYSTEMS INC has improved earnings per share by 15.6% 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, FLIR SYSTEMS INC reported lower earnings of $1.22 versus $1.47 in the prior year. This year, the market expects an improvement in earnings ($1.37 versus $1.22).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Electronic Equipment, Instruments & Components industry average, but is greater than that of the S&P 500. The net income increased by 13.7% when compared to the same quarter one year prior, going from $46.49 million to $52.86 million.

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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