Watch Out: Barbarians At The Gate For JDS Uniphase Corp (CA (JDSU)

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 JDS Uniphase Corp (CA ( JDSU) 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 JDS Uniphase Corp (CA as such a stock due to the following factors:

  • JDSU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $34.6 million.
  • JDSU has traded 1.5 million shares today.
  • JDSU traded in a range 204% of the normal price range with a price range of $0.65.
  • JDSU traded above its daily resistance level (quality: 34 days, meaning that the stock is crossing a resistance level set by the last 34 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in JDSU with the Ticky from Trade-Ideas. See the FREE profile for JDSU NOW at Trade-Ideas

More details on JDSU:

JDS Uniphase Corporation provides network and service enablement solutions and optical products worldwide. Currently there are 6 analysts that rate JDS Uniphase Corp (CA a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for JDS Uniphase Corp (CA has been 4.5 million shares per day over the past 30 days. JDS Uniphase Corp (CA has a market cap of $3.1 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 1.53 and a short float of 6.3% with 4.49 days to cover. Shares are up 2% 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 JDS Uniphase Corp (CA as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • JDSU's revenue growth has slightly outpaced the industry average of 5.7%. Since the same quarter one year prior, revenues slightly increased by 1.1%. 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.
  • This stock has managed to rise its share value by 6.28% over the past twelve months. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • Despite currently having a low debt-to-equity ratio of 0.46, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 2.87 is very high and demonstrates very strong liquidity.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Communications Equipment industry. The net income has significantly decreased by 3333.3% when compared to the same quarter one year ago, falling from $0.30 million to -$9.70 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Communications Equipment industry and the overall market, JDS UNIPHASE CORP's return on equity significantly trails 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.

null

More from Markets

European and U.S. Stocks Called Higher as Earnings Season Hits Full-Speed

European and U.S. Stocks Called Higher as Earnings Season Hits Full-Speed

3 Things Investors Must Know for Monday

3 Things Investors Must Know for Monday

Street Stats: The Mid-Term Elections May Be a Rollercoaster Ride for Investors

Street Stats: The Mid-Term Elections May Be a Rollercoaster Ride for Investors

Apple and GE Switch Roles; Musk's Super Control of Tesla Explained -- ICYMI

Apple and GE Switch Roles; Musk's Super Control of Tesla Explained -- ICYMI

Trump May Be More to Blame For Higher Oil Prices Than OPEC

Trump May Be More to Blame For Higher Oil Prices Than OPEC