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 Mondelez International ( MDLZ) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Mondelez International as such a stock due to the following factors:

  • MDLZ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $517.1 million.
  • MDLZ has traded 4.9 million shares today.
  • MDLZ is trading at 1.87 times the normal volume for the stock at this time of day.
  • MDLZ crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on MDLZ:

Mondelez International, Inc., through its subsidiaries, manufactures and markets snack food and beverage products worldwide. The stock currently has a dividend yield of 1.7%. MDLZ has a PE ratio of 27.4. Currently there are 11 analysts that rate Mondelez International a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Mondelez International has been 9.7 million shares per day over the past 30 days. Mondelez International has a market cap of $57.9 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 1.23 and a short float of 0.7% with 0.84 days to cover. Shares are down 2.1% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Mondelez International 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, expanding profit margins and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and relatively poor performance when compared with the S&P 500 during the past year.

Highlights from the ratings report include:
  • The debt-to-equity ratio is somewhat low, currently at 0.60, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.46 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • 38.06% is the gross profit margin for MONDELEZ INTERNATIONAL INC which we consider to be strong. Regardless of MDLZ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.66% trails the industry average.
  • 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 Food Products industry. The net income has significantly decreased by 71.7% when compared to the same quarter one year ago, falling from $1,766.00 million to $500.00 million.
  • Net operating cash flow has significantly decreased to $2,413.00 million or 53.70% 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.

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