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

  • TER has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $66.3 million.
  • TER has traded 56,117 shares today.
  • TER traded in a range 210.1% of the normal price range with a price range of $1.04.
  • TER traded above its daily resistance level (quality: 88 days, meaning that the stock is crossing a resistance level set by the last 88 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 TER:

Teradyne, Inc. provides automatic test equipment worldwide. The stock currently has a dividend yield of 1.3%. TER has a PE ratio of 35. Currently there are 7 analysts that rate Teradyne a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Teradyne has been 2.3 million shares per day over the past 30 days. Teradyne has a market cap of $4.0 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.91 and a short float of 3.2% with 2.04 days to cover. Shares are down 3.7% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Teradyne as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, solid stock price performance and growth in earnings per share. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry average. The net income increased by 1.6% when compared to the same quarter one year prior, going from $101.21 million to $102.88 million.
  • TER has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.61, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for TERADYNE INC is rather high; currently it is at 61.64%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 20.06% trails the industry average.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • Despite the weak revenue results, TER has outperformed against the industry average of 13.4%. Since the same quarter one year prior, revenues slightly dropped by 2.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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