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.

Trade-Ideas LLC identified Harris Corporation ( HRS) 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 Harris Corporation as such a stock due to the following factors:

  • HRS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $81.2 million.
  • HRS has traded 1.8 million shares today.
  • HRS traded in a range 259.8% of the normal price range with a price range of $3.14.
  • HRS traded above its daily resistance level (quality: 2 days, meaning that the stock is crossing a resistance level set by the last 2 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 HRS with the Ticky from Trade-Ideas. See the FREE profile for HRS NOW at Trade-Ideas

More details on HRS:

Harris Corporation, together with its subsidiaries, operates as an international communications and information technology company worldwide. The company operates through RF Communications, Integrated Network Solutions, and Government Communications Systems segments. The stock currently has a dividend yield of 2.6%. HRS has a PE ratio of 14.2. Currently there are 3 analysts that rate Harris Corporation a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Harris Corporation has been 942,700 shares per day over the past 30 days. Harris has a market cap of $7.5 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 1.65 and a short float of 3.4% with 3.47 days to cover. Shares are down 1.6% year-to-date as of the close of trading on Wednesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Harris Corporation as a buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations, growth in earnings per share, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Communications Equipment industry and the overall market, HARRIS CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $142.10 million or 32.92% when compared to the same quarter last year. In addition, HARRIS CORP has also vastly surpassed the industry average cash flow growth rate of -19.80%.
  • HARRIS CORP's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, HARRIS CORP increased its bottom line by earning $5.00 versus $4.16 in the prior year. This year, the market expects an improvement in earnings ($5.04 versus $5.00).
  • HRS, with its decline in revenue, slightly underperformed the industry average of 0.0%. Since the same quarter one year prior, revenues slightly dropped by 1.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • HRS's debt-to-equity ratio of 0.91 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.04 is sturdy.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

null