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 Under Armour ( UA) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Under Armour as such a stock due to the following factors:

  • UA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $159.0 million.
  • UA has a PE ratio of 87.1.
  • UA is currently in the upper 30% of its 1-year range.
  • UA is in the upper 25% of its 20-day range.
  • UA is in the upper 35% of its 5-day range.
  • UA is currently trading above yesterday's high.
  • UA has experienced a gap between today's open and yesterday's close of 1.9%.

'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.

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More details on UA:

Under Armour, Inc., together with its subsidiaries, develops, markets, and distributes branded performance apparel, footwear, and accessories for men, women, and youth primarily in North America, Europe, the Middle East, Africa, the Asia-Pacific, and Latin America. UA has a PE ratio of 87.1. Currently there are 15 analysts that rate Under Armour a buy, 1 analyst rates it a sell, and 11 rate it a hold.

The average volume for Under Armour has been 2.2 million shares per day over the past 30 days. Under Armour has a market cap of $14.8 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of -0.04 and a short float of 6.7% with 6.44 days to cover. Shares are up 24% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Under Armour as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and solid stock price performance. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 11.4%. Since the same quarter one year prior, revenues rose by 31.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Although UA's debt-to-equity ratio of 0.21 is very low, it is currently higher than that of the industry average. To add to this, UA has a quick ratio of 2.07, which demonstrates the ability of the company to cover short-term liquidity needs.
  • UNDER ARMOUR INC has improved earnings per share by 35.6% in the most recent quarter compared to the same quarter a year ago. 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, UNDER ARMOUR INC increased its bottom line by earning $0.95 versus $0.75 in the prior year. This year, the market expects an improvement in earnings ($1.09 versus $0.95).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry. The net income increased by 36.7% when compared to the same quarter one year prior, rising from $64.17 million to $87.71 million.
  • Powered by its strong earnings growth of 35.59% and other important driving factors, this stock has surged by 55.01% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.

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