Trade-Ideas: Sabre Corporation (SABR) 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 Sabre Corporation ( SABR) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Sabre Corporation as such a stock due to the following factors:

  • SABR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $68.7 million.
  • SABR has traded 108,844 shares today.
  • SABR traded in a range 202.6% of the normal price range with a price range of $1.16.
  • SABR traded below its daily resistance level (quality: 55 days, meaning that the stock is crossing a resistance level set by the last 55 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on SABR:

Sabre Corporation provides technology solutions to the travel and tourism industry worldwide. It operates in two segments: Travel Network, and Airline and Hospitality Solutions. The stock currently has a dividend yield of 1.4%. SABR has a PE ratio of 51. Currently there are 10 analysts that rate Sabre Corporation a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Sabre Corporation has been 1.3 million shares per day over the past 30 days. Sabre has a market cap of $7.1 billion and is part of the technology sector and computer software & services industry. Shares are up 30.6% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Sabre Corporation as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and notable return on equity. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:
  • Powered by its strong earnings growth of 125.00% and other important driving factors, this stock has surged by 46.06% over the past year, outperforming the rise in the S&P 500 Index during the same period.
  • The revenue growth came in higher than the industry average of 22.5%. Since the same quarter one year prior, revenues slightly increased by 6.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • SABRE CORP 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, SABRE CORP turned its bottom line around by earning $0.41 versus -$0.04 in the prior year. This year, the market expects an improvement in earnings ($1.05 versus $0.41).
  • Net operating cash flow has significantly increased by 95.41% to $113.62 million when compared to the same quarter last year. In addition, SABRE CORP has also vastly surpassed the industry average cash flow growth rate of -11.71%.
  • The debt-to-equity ratio is very high at 10.80 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, SABR maintains a poor quick ratio of 0.74, which illustrates the inability to avoid short-term cash problems.

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