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 Jacobs Engineering Group ( JEC) 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 Jacobs Engineering Group as such a stock due to the following factors:

  • JEC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $50.2 million.
  • JEC has traded 234,225 shares today.
  • JEC is trading at 1.59 times the normal volume for the stock at this time of day.
  • JEC 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 JEC:

Jacobs Engineering Group Inc. provides technical, professional, and construction services to various industrial, commercial, and governmental clients. JEC has a PE ratio of 18.3. Currently there are 9 analysts that rate Jacobs Engineering Group a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for Jacobs Engineering Group has been 1.3 million shares per day over the past 30 days. Jacobs Engineering Group has a market cap of $6.0 billion and is part of the services sector and diversified services industry. The stock has a beta of 1.97 and a short float of 3.8% with 4.54 days to cover. Shares are up 4.7% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Jacobs Engineering Group as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in net income, growth in earnings per share and attractive valuation levels. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • JEC's revenue growth has slightly outpaced the industry average of 3.1%. Since the same quarter one year prior, revenues slightly increased by 3.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • JEC's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, JEC has a quick ratio of 1.52, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Construction & Engineering industry. The net income increased by 6.8% when compared to the same quarter one year prior, going from $93.73 million to $100.08 million.
  • JACOBS ENGINEERING GROUP INC has improved earnings per share by 8.4% in the most recent quarter compared to the same quarter a year ago. 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, JACOBS ENGINEERING GROUP INC reported lower earnings of $2.48 versus $3.23 in the prior year. This year, the market expects an improvement in earnings ($3.40 versus $2.48).

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