IGate (IGTE) Marked As A Barbarian At The Gate

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

  • IGTE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $21.7 million.
  • IGTE has traded 231,454 shares today.
  • IGTE traded in a range 312.8% of the normal price range with a price range of $0.31.
  • IGTE traded above its daily resistance level (quality: 530 days, meaning that the stock is crossing a resistance level set by the last 530 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 IGTE with the Ticky from Trade-Ideas. See the FREE profile for IGTE NOW at Trade-Ideas

More details on IGTE:

iGATE Corporation, through its subsidiaries, provides information technology (IT) and IT-enabled operations offshore outsourcing solutions and services to large and medium-size organizations. IGTE has a PE ratio of 298. Currently there are 3 analysts that rate iGate a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for iGate has been 1.2 million shares per day over the past 30 days. iGate has a market cap of $3.9 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 2.49 and a short float of 2.8% with 1.71 days to cover. Shares are up 20.8% year-to-date as of the close of trading on Tuesday.

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 iGate as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 22.6%. 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.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 20.3% when compared to the same quarter one year prior, going from $31.62 million to $38.02 million.
  • Even though the current debt-to-equity ratio is 1.18, it is still below the industry average, suggesting that this level of debt is acceptable within the IT Services industry. Despite the fact that IGTE's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.77 is high and demonstrates strong liquidity.
  • 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 IT Services industry and the overall market, IGATE CORP'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 $0.35 million or 97.98% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much 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

Trade Talks, Walmart, Nvidia, Amazon and Uber - 5 Things You Must Know

Trade Talks, Walmart, Nvidia, Amazon and Uber - 5 Things You Must Know

Market Jitters Ease on Fresh U.S.-China Trade Talks

Market Jitters Ease on Fresh U.S.-China Trade Talks

Rewind: Jim Cramer on the Market Selloff, Macy's, Constellation and Canopy

Rewind: Jim Cramer on the Market Selloff, Macy's, Constellation and Canopy

Loncar China BioPharma ETF Makes Nasdaq Debut

Loncar China BioPharma ETF Makes Nasdaq Debut

Stocks Close Lower But Trim Losses With Late Rebound

Stocks Close Lower But Trim Losses With Late Rebound