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 Roper Technologies ( ROP) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Roper Technologies as such a stock due to the following factors:

  • ROP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $50.4 million.
  • ROP has traded 488,508 shares today.
  • ROP is trading at 16.79 times the normal volume for the stock at this time of day.
  • ROP crossed below its 200-day simple moving average.

'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.

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More details on ROP:

Roper Technologies, Inc., a diversified technology company, designs and develops software (both license and software-as-a-service), and engineered products and solutions for healthcare, transportation, food, energy, water, education, and academic research markets worldwide. The stock currently has a dividend yield of 0.6%. ROP has a PE ratio of 27. Currently there are 5 analysts that rate Roper Technologies a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Roper Technologies has been 348,300 shares per day over the past 30 days. Roper has a market cap of $17.6 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 0.64 and a short float of 1.7% with 4.72 days to cover. Shares are up 11.9% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Roper Technologies as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, growth in earnings per share and increase in net income. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • ROP's revenue growth has slightly outpaced the industry average of 4.7%. Since the same quarter one year prior, revenues slightly increased by 4.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.55, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, ROP has a quick ratio of 1.75, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • ROPER TECHNOLOGIES INC has improved earnings per share by 5.5% 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, ROPER TECHNOLOGIES INC increased its bottom line by earning $6.40 versus $5.37 in the prior year. This year, the market expects an improvement in earnings ($6.87 versus $6.40).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Industrial Conglomerates industry average. The net income increased by 5.8% when compared to the same quarter one year prior, going from $147.23 million to $155.77 million.

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