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

  • MTZ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $22.2 million.
  • MTZ has traded 2.9 million shares today.
  • MTZ traded in a range 200.4% of the normal price range with a price range of $1.59.
  • MTZ traded above its daily resistance level (quality: 21 days, meaning that the stock is crossing a resistance level set by the last 21 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 MTZ:

MasTec, Inc., an infrastructure construction company, provides engineering, building, installation, maintenance, and upgrade services for communications, energy, and utility infrastructure in the United States and internationally. MTZ has a PE ratio of 23. Currently there are 7 analysts that rate MasTec a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for MasTec has been 1.4 million shares per day over the past 30 days. MasTec has a market cap of $1.4 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.19 and a short float of 8.8% with 4.69 days to cover. Shares are down 23.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates MasTec as a hold. The company's strongest point has been its a solid financial position based on a variety of debt and liquidity measures that we have looked at. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from the ratings report include:
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 12.9%. Since the same quarter one year prior, revenues slightly dropped by 3.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The debt-to-equity ratio of 1.19 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, MTZ's quick ratio is somewhat strong at 1.33, demonstrating the ability to handle short-term liquidity needs.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Construction & Engineering industry and the overall market, MASTEC INC's return on equity is below that of both the industry average and the S&P 500.
  • MASTEC INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, MASTEC INC reported lower earnings of $1.39 versus $1.74 in the prior year. For the next year, the market is expecting a contraction of 44.6% in earnings ($0.77 versus $1.39).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Construction & Engineering industry. The net income has significantly decreased by 111.0% when compared to the same quarter one year ago, falling from $33.72 million to -$3.70 million.

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