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 Trimble Navigation ( TRMB) 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 Trimble Navigation as such a stock due to the following factors:

  • TRMB has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.0 million.
  • TRMB has traded 1.5 million shares today.
  • TRMB traded in a range 243.7% of the normal price range with a price range of $1.06.
  • TRMB traded above its daily resistance level (quality: 4 days, meaning that the stock is crossing a resistance level set by the last 4 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 TRMB:

Trimble Navigation Limited provides technology solutions to increase the work processes of office and mobile field professionals worldwide. TRMB has a PE ratio of 32.1. Currently there are 7 analysts that rate Trimble Navigation a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Trimble Navigation has been 1.6 million shares per day over the past 30 days. Trimble Navigation has a market cap of $6.7 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.98 and a short float of 3.8% with 10.25 days to cover. Shares are down 4.2% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Trimble Navigation as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.31, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.92 is somewhat weak and could be cause for future problems.
  • The gross profit margin for TRIMBLE NAVIGATION LTD is rather high; currently it is at 57.43%. Regardless of TRMB's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TRMB's net profit margin of 9.90% compares favorably to the industry average.
  • TRMB, with its decline in revenue, slightly underperformed the industry average of 3.6%. Since the same quarter one year prior, revenues slightly dropped by 5.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Net operating cash flow has decreased to $96.62 million or 29.07% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, TRIMBLE NAVIGATION LTD's return on equity is below 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.

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