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 Standard Pacific ( SPF) 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 Standard Pacific as such a stock due to the following factors:

  • SPF has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $30.1 million.
  • SPF has traded 3.9 million shares today.
  • SPF traded in a range 204% of the normal price range with a price range of $0.55.
  • SPF traded above its daily resistance level (quality: 144 days, meaning that the stock is crossing a resistance level set by the last 144 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 SPF with the Ticky from Trade-Ideas. See the FREE profile for SPF NOW at Trade-Ideas

More details on SPF:

Standard Pacific Corp. operates as a builder of single-family attached and detached homes in the United States. It constructs homes for various homebuyers primarily move-up buyers in metropolitan markets in California, Florida, the Carolinas, Texas, Arizona, and Colorado. SPF has a PE ratio of 13.7. Currently there are 2 analysts that rate Standard Pacific a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Standard Pacific has been 3.3 million shares per day over the past 30 days. Standard Pacific has a market cap of $2.0 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.67 and a short float of 20.3% with 8.30 days to cover. Shares are up 5.6% 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 Standard Pacific as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels and notable return on equity. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and poor profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.1%. Since the same quarter one year prior, revenues rose by 24.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • STANDARD PACIFIC 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, STANDARD PACIFIC CORP increased its bottom line by earning $0.53 versus $0.47 in the prior year. This year, the market expects an improvement in earnings ($0.60 versus $0.53).
  • Net operating cash flow has significantly decreased to -$103.85 million or 273.29% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The debt-to-equity ratio of 1.33 is relatively high when compared with the industry average, suggesting a need for better debt level management.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

null