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 Western Refining ( WNR) 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 Western Refining as such a stock due to the following factors:

  • WNR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $61.5 million.
  • WNR has traded 553,664 shares today.
  • WNR traded in a range 204.4% of the normal price range with a price range of $2.73.
  • WNR traded above its daily resistance level (quality: 16 days, meaning that the stock is crossing a resistance level set by the last 16 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.

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More details on WNR:

Western Refining, Inc. operates as an independent crude oil refiner and marketer of refined products. The company operates in four segments: Refining, NTI, WNRL, and Retail. The stock currently has a dividend yield of 3.1%. WNR has a PE ratio of 8. Currently there are 3 analysts that rate Western Refining a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Western Refining has been 1.3 million shares per day over the past 30 days. Western Refining has a market cap of $4.2 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.89 and a short float of 7.2% with 4.01 days to cover. Shares are up 19.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Western Refining as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and increase in stock price during the past year. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.53, is low and is below the industry average, implying that there has been successful management of debt levels.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • WNR, with its decline in revenue, slightly underperformed the industry average of 33.2%. Since the same quarter one year prior, revenues fell by 35.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has decreased by 14.5% when compared to the same quarter one year ago, dropping from $156.70 million to $133.92 million.

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