Fiserv (FISV) Marked As A Barbarian At The Gate

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 Fiserv ( FISV) 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 Fiserv as such a stock due to the following factors:

  • FISV has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $77.8 million.
  • FISV has traded 52,591 shares today.
  • FISV traded in a range 275.9% of the normal price range with a price range of $3.04.
  • FISV traded above its daily resistance level (quality: 26 days, meaning that the stock is crossing a resistance level set by the last 26 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 FISV:

Fiserv, Inc., together with its subsidiaries, provides financial services technology worldwide. FISV has a PE ratio of 26.3. Currently there are 5 analysts that rate Fiserv a buy, no analysts rate it a sell, and 9 rate it a hold.

The average volume for Fiserv has been 1.0 million shares per day over the past 30 days. Fiserv has a market cap of $18.7 billion and is part of the services sector and diversified services industry. The stock has a beta of 0.82 and a short float of 1.4% with 2.99 days to cover. Shares are up 10.8% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Fiserv as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, notable return on equity, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 21.9%. Since the same quarter one year prior, revenues slightly increased by 4.2%. 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.
  • Compared to its closing price of one year ago, FISV's share price has jumped by 27.67%, exceeding the performance of the broader market during that same time frame. 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.
  • FISERV INC's earnings per share declined by 13.1% 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, FISERV INC increased its bottom line by earning $2.98 versus $2.45 in the prior year. This year, the market expects an improvement in earnings ($3.79 versus $2.98).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the IT Services industry and the overall market on the basis of return on equity, FISERV INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • The gross profit margin for FISERV INC is rather high; currently it is at 50.76%. Regardless of FISV's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 13.75% trails the industry average.

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