Trade-Ideas: Berry Plastics Group (BERY) Is Today's

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 Berry Plastics Group ( BERY) 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 Berry Plastics Group as such a stock due to the following factors:

  • BERY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $43.5 million.
  • BERY has traded 1.2 million shares today.
  • BERY traded in a range 214.5% of the normal price range with a price range of $1.60.
  • BERY traded above its daily resistance level (quality: 3 days, meaning that the stock is crossing a resistance level set by the last 3 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in BERY with the Ticky from Trade-Ideas. See the FREE profile for BERY NOW at Trade-Ideas

More details on BERY:

Berry Plastics Group, Inc. manufactures and distributes plastic consumer packaging and engineered materials in North America and internationally. The company operates through four segments: Rigid Open Top, Rigid Closed Top, Engineered Materials, and Flexible Packaging. BERY has a PE ratio of 59.2. Currently there are 7 analysts that rate Berry Plastics Group a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Berry Plastics Group has been 1.2 million shares per day over the past 30 days. Berry Plastics Group has a market cap of $4.0 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 0.32 and a short float of 1.4% with 1.63 days to cover. Shares are up 6.9% year-to-date as of the close of trading on Thursday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Berry Plastics Group as a sell. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • The gross profit margin for BERRY PLASTICS GROUP INC is rather low; currently it is at 20.41%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.06% trails that of the industry average.
  • Net operating cash flow has decreased to $100.00 million or 41.86% 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.
  • This stock has increased by 52.63% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • BERRY PLASTICS GROUP INC reported significant earnings per share improvement 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. This trend suggests that the performance of the business is improving. During the past fiscal year, BERRY PLASTICS GROUP INC increased its bottom line by earning $0.51 versus $0.47 in the prior year. This year, the market expects an improvement in earnings ($1.70 versus $0.51).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Containers & Packaging industry. The net income increased by 116.7% when compared to the same quarter one year prior, rising from $6.00 million to $13.00 million.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

If you liked this article you might like

10 Sectors That Will Profit Big-Time From Oil's Crash

10 Sectors That Will Profit Big-Time From Oil's Crash

Bullish and Bearish Reversals for This Week

Bullish and Bearish Reversals for This Week

Top Mid-Cap Stocks for 2017: Berry Plastics, Crane Co.

Top Mid-Cap Stocks for 2017: Berry Plastics, Crane Co.

'Mad Money' Lightning Round: International Paper, Home Depot, Newell Brands

'Mad Money' Lightning Round: International Paper, Home Depot, Newell Brands

Jim Cramer's 'Mad Money' Recap: This Rotation's Too Hard for the Bulls

Jim Cramer's 'Mad Money' Recap: This Rotation's Too Hard for the Bulls