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 Crown Holdings ( CCK) 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 Crown Holdings as such a stock due to the following factors:

  • CCK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $62.6 million.
  • CCK has traded 234,531 shares today.
  • CCK traded in a range 267.6% of the normal price range with a price range of $2.27.
  • CCK traded above its daily resistance level (quality: 1 day, meaning that the stock is crossing a resistance level set by the last 1 calendar day. 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 CCK:

Crown Holdings, Inc. designs, manufactures, and sells packaging products for consumer goods in Americas, Europe, and the Asia Pacific. CCK has a PE ratio of 19.5. Currently there are 6 analysts that rate Crown Holdings a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Crown Holdings has been 1.1 million shares per day over the past 30 days. Crown has a market cap of $7.6 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.46 and a short float of 2.6% with 3.04 days to cover. Shares are up 6.4% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Crown Holdings as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 4.8%. Since the same quarter one year prior, revenues slightly increased by 2.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • CROWN HOLDINGS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, CROWN HOLDINGS INC increased its bottom line by earning $2.78 versus $2.30 in the prior year. This year, the market expects an improvement in earnings ($3.60 versus $2.78).
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Containers & Packaging industry and the overall market, CROWN HOLDINGS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for CROWN HOLDINGS INC is rather low; currently it is at 16.08%. Regardless of CCK's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 0.61% trails the industry average.

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