MSCI (MSCI) Falls Further As It's Water-Logged And Getting Wetter

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

  • MSCI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $41.5 million.
  • MSCI has traded 265,866 shares today.
  • MSCI traded in a range 209.1% of the normal price range with a price range of $1.31.
  • MSCI traded below its daily resistance level (quality: 6 days, meaning that the stock is crossing a resistance level set by the last 6 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 MSCI:

MSCI Inc., together with its subsidiaries, provides investment decision support tools worldwide. Its tools include indexes, portfolio risk and performance analytics, and multi-asset class market risk analytics products and services. The stock currently has a dividend yield of 1.1%. MSCI has a PE ratio of 36. Currently there are 3 analysts that rate MSCI a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for MSCI has been 576,800 shares per day over the past 30 days. MSCI has a market cap of $7.1 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 0.59 and a short float of 0.8% with 0.96 days to cover. Shares are up 34.4% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates MSCI as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, reasonable valuation levels and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • MSCI's revenue growth has slightly outpaced the industry average of 7.0%. Since the same quarter one year prior, revenues slightly increased by 9.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 42.00% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MSCI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • MSCI INC has improved earnings per share by 10.0% 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, MSCI INC increased its bottom line by earning $1.70 versus $1.65 in the prior year. This year, the market expects an improvement in earnings ($2.20 versus $1.70).
  • The gross profit margin for MSCI INC is rather high; currently it is at 69.84%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 16.67% is above that of the industry average.

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