Barbarian At The Gate: Nimble Storage (NMBL)

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 Nimble Storage ( NMBL) 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 Nimble Storage as such a stock due to the following factors:

  • NMBL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $36.3 million.
  • NMBL has traded 1.2 million shares today.
  • NMBL traded in a range 200.3% of the normal price range with a price range of $2.00.
  • NMBL traded above its daily resistance level (quality: 291 days, meaning that the stock is crossing a resistance level set by the last 291 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 NMBL with the Ticky from Trade-Ideas. See the FREE profile for NMBL NOW at Trade-Ideas

More details on NMBL:

Nimble Storage, Inc. provides flash-optimized storage platforms. The company's software and storage systems handle various mainstream applications, including virtual desktops, databases, email, collaboration, and analytics. Currently there are 13 analysts that rate Nimble Storage a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Nimble Storage has been 879,500 shares per day over the past 30 days. Nimble has a market cap of $2.2 billion and is part of the technology sector and computer hardware industry. Shares are up 4.2% 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 Nimble Storage as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, weak operating cash flow and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Computers & Peripherals industry. The net income has significantly decreased by 47.9% when compared to the same quarter one year ago, falling from -$19.60 million to -$28.99 million.
  • Net operating cash flow has significantly decreased to -$8.31 million or 1937.83% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • NIMBLE STORAGE INC's earnings per share declined by 35.7% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, NIMBLE STORAGE INC reported poor results of -$1.37 versus -$0.32 in the prior year. This year, the market expects an improvement in earnings (-$0.26 versus -$1.37).
  • Looking at where the stock is today compared to one year ago, we find that it is higher, and it has outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • Compared to other companies in the Computers & Peripherals industry and the overall market, NIMBLE STORAGE INC's return on equity significantly trails that of both the industry average and the S&P 500.

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

Global Stocks Mixed as Oil, Commodity Price Surges Ignite Fresh Inflation Talk

Global Stocks Mixed as Oil, Commodity Price Surges Ignite Fresh Inflation Talk

P&G Buys Consumer Healthcare Unit From Germany's Merck in First Peltz-Era Deal

P&G Buys Consumer Healthcare Unit From Germany's Merck in First Peltz-Era Deal

Amazon's Stock Spikes After Jeff Bezos Says He Has 100 Million Prime Members

Amazon's Stock Spikes After Jeff Bezos Says He Has 100 Million Prime Members

Oil Prices Soaring to $100 Makes These 4 Stocks Winners

Oil Prices Soaring to $100 Makes These 4 Stocks Winners

Amazon, Procter & Gamble, Southwest and Netflix - 5 Things You Must Know

Amazon, Procter & Gamble, Southwest and Netflix - 5 Things You Must Know