Watch Out: Barbarians At The Gate For First Niagara Financial Group (FNFG)

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 First Niagara Financial Group ( FNFG) 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 First Niagara Financial Group as such a stock due to the following factors:

  • FNFG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.2 million.
  • FNFG has traded 1.3 million shares today.
  • FNFG traded in a range 205.6% of the normal price range with a price range of $0.26.
  • FNFG traded above its daily resistance level (quality: 429 days, meaning that the stock is crossing a resistance level set by the last 429 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 FNFG with the Ticky from Trade-Ideas. See the FREE profile for FNFG NOW at Trade-Ideas

More details on FNFG:

First Niagara Financial Group, Inc. operates as the bank holding company for First Niagara Bank, N.A. that provides retail and commercial banking, and other financial services to individuals, families, and businesses. The stock currently has a dividend yield of 3.5%. Currently there are 2 analysts that rate First Niagara Financial Group a buy, 3 analysts rate it a sell, and 6 rate it a hold.

The average volume for First Niagara Financial Group has been 2.6 million shares per day over the past 30 days. First Niagara Financial Group has a market cap of $3.2 billion and is part of the financial sector and banking industry. The stock has a beta of 1.19 and a short float of 4.2% with 5.38 days to cover. Shares are up 9.2% year-to-date as of the close of trading on Friday.

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 First Niagara Financial Group as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and deteriorating net income.

Highlights from the ratings report include:
  • FNFG's revenue growth has slightly outpaced the industry average of 0.1%. Since the same quarter one year prior, revenues slightly increased by 0.6%. 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.
  • The gross profit margin for FIRST NIAGARA FINANCIAL GRP is currently very high, coming in at 87.73%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, FNFG's net profit margin of 13.56% significantly trails the industry average.
  • After a year of stock price fluctuations, the net result is that FNFG's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Commercial Banks industry and the overall market, FIRST NIAGARA FINANCIAL GRP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to $45.00 million or 70.77% 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.

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.

More from Markets

Baidu Stock Plummets After COO Qi Lu Resignation

Baidu Stock Plummets After COO Qi Lu Resignation

Wondering What Blockchain Technology Really Is? This Expert Explains It All

Wondering What Blockchain Technology Really Is? This Expert Explains It All

Dow Rises Sharply as U.S.-China Trade Tensions Thaw

Dow Rises Sharply as U.S.-China Trade Tensions Thaw

GE Confirms $11.1 Billion Transportation Merger With Wabtec

GE Confirms $11.1 Billion Transportation Merger With Wabtec

Gold Prices Look 'Rich' at Current Levels - Here's What Could Change That

Gold Prices Look 'Rich' at Current Levels - Here's What Could Change That