Barbarian At The Gate: Casey's General Stores (CASY)

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 Casey's General Stores ( CASY) 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 Casey's General Stores as such a stock due to the following factors:

  • CASY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $22.1 million.
  • CASY has traded 58,195 shares today.
  • CASY traded in a range 222% of the normal price range with a price range of $4.16.
  • CASY traded above its daily resistance level (quality: 28 days, meaning that the stock is crossing a resistance level set by the last 28 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 CASY:

Casey's General Stores, Inc., together with its subsidiaries, operates convenience stores under the Casey's General Store name in 14 Midwestern states, primarily Iowa, Missouri, and Illinois. The stock currently has a dividend yield of 1%. CASY has a PE ratio of 2. Currently there are 3 analysts that rate Casey's General Stores a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Casey's General Stores has been 256,100 shares per day over the past 30 days. Casey's General Stores has a market cap of $3.2 billion and is part of the services sector and retail industry. The stock has a beta of 0.56 and a short float of 1.7% with 3.13 days to cover. Shares are down 8.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Casey's General Stores as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, reasonable valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • 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. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • CASEYS GENERAL STORES 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. During the past fiscal year, CASEYS GENERAL STORES INC increased its bottom line by earning $3.27 versus $2.86 in the prior year. This year, the market expects an improvement in earnings ($4.31 versus $3.27).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food & Staples Retailing industry. The net income increased by 210.7% when compared to the same quarter one year prior, rising from $12.65 million to $39.32 million.
  • Net operating cash flow has significantly increased by 122.51% to $56.47 million when compared to the same quarter last year. In addition, CASEYS GENERAL STORES INC has also vastly surpassed the industry average cash flow growth rate of 20.66%.

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