Trade-Ideas LLC identified Interpublic Group of Companies ( IPG) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Interpublic Group of Companies as such a stock due to the following factors:

  • IPG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $83.7 million.
  • IPG has traded 1.3 million shares today.
  • IPG is trading at 2.05 times the normal volume for the stock at this time of day.
  • IPG crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on IPG:

The Interpublic Group of Companies, Inc. provides advertising and marketing services. The company operates in two segments, Integrated Agency Networks and Constituency Management Group. The stock currently has a dividend yield of 2.4%. IPG has a PE ratio of 16. Currently there are 8 analysts that rate Interpublic Group of Companies a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Interpublic Group of Companies has been 3.7 million shares per day over the past 30 days. Interpublic Group of Companies has a market cap of $8.2 billion and is part of the services sector and media industry. The stock has a beta of 1.63 and a short float of 2.7% with 2.41 days to cover. Shares are down 2.5% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Interpublic Group of Companies as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and notable return on equity. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. 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.
  • INTERPUBLIC GROUP OF COS has improved earnings per share by 26.1% 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, INTERPUBLIC GROUP OF COS increased its bottom line by earning $1.12 versus $0.59 in the prior year. This year, the market expects an improvement in earnings ($1.16 versus $1.12).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Media industry average. The net income increased by 21.9% when compared to the same quarter one year prior, going from $99.40 million to $121.20 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.4%. Since the same quarter one year prior, revenues slightly increased by 1.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Media industry and the overall market, INTERPUBLIC GROUP OF COS's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.

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