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 Atwood Oceanics ( ATW) 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 Atwood Oceanics as such a stock due to the following factors:

  • ATW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $74.1 million
  • ATW has traded 3.9 million shares today
  • ATW traded in a range 283.5% of the normal price range with a price range of $3.52
  • ATW traded above its daily resistance level (quality: 14 days, meaning that the stock is crossing a resistance level set by the last 14 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.

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More details on ATW:

Atwood Oceanics, Inc., an offshore drilling contractor, engages in the drilling and completion of exploratory and developmental oil and gas wells worldwide. The stock currently has a dividend yield of 3.4%. ATW has a PE ratio of 6.2400000000000002131628207280300557613372802734375. Currently there are five analysts that rate Atwood Oceanics a buy, one analyst rates it a sell, and seven rate it a hold.

The average volume for Atwood Oceanics has been 2.1 million shares per day over the past 30 days. Atwood Oceanics has a market cap of $1.88 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.27 and a short float of 11.5% with 3.48 days to cover. Shares are up 2.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Atwood Oceanics as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, deteriorating net income and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 2.6%. Since the same quarter one year prior, revenues rose by 23.5%. 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.
  • ATW's debt-to-equity ratio of 0.67 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. Despite the fact that ATW's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.16 is high and demonstrates strong liquidity.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 39.61%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 44.53% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Energy Equipment & Services industry and the overall market, ATWOOD OCEANICS's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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