Trade-Ideas LLC identified ITT ( ITT) 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 ITT as such a stock due to the following factors:

  • ITT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.0 million.
  • ITT has traded 743,572 shares today.
  • ITT traded in a range 234.5% of the normal price range with a price range of $2.30.
  • ITT traded above its daily resistance level (quality: 50 days, meaning that the stock is crossing a resistance level set by the last 50 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 ITT:

ITT Corporation manufactures and sells engineered critical components and customized technology solutions for the energy, transportation, and industrial markets worldwide. The stock currently has a dividend yield of 1.3%. ITT has a PE ratio of 11. Currently there are 6 analysts that rate ITT a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for ITT has been 668,700 shares per day over the past 30 days. ITT has a market cap of $3.2 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.44 and a short float of 1% with 1.01 days to cover. Shares are down 11.1% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates ITT as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, attractive valuation levels, expanding profit margins, growth in earnings per share and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 271.5% when compared to the same quarter one year prior, rising from $38.30 million to $142.30 million.
  • 37.23% is the gross profit margin for ITT CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 22.65% significantly outperformed against the industry average.
  • ITT CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ITT CORP reported lower earnings of $2.03 versus $5.30 in the prior year. This year, the market expects an improvement in earnings ($2.50 versus $2.03).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 14.4%. Since the same quarter one year prior, revenues slightly dropped by 5.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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