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

  • SAFM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $41.0 million.
  • SAFM has traded 176,713 shares today.
  • SAFM traded in a range 205.8% of the normal price range with a price range of $4.56.
  • SAFM traded above its daily resistance level (quality: 2 days, meaning that the stock is crossing a resistance level set by the last 2 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 SAFM:

Sanderson Farms, Inc., an integrated poultry processing company, produces, processes, markets, and distributes fresh, frozen, and prepared chicken products in the United States. The stock currently has a dividend yield of 1.2%. SAFM has a PE ratio of 6. Currently there is 1 analyst that rates Sanderson Farms a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Sanderson Farms has been 389,200 shares per day over the past 30 days. Sanderson Farms has a market cap of $1.7 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 0.97 and a short float of 38% with 14.14 days to cover. Shares are down 13.3% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Sanderson Farms 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, notable return on equity and attractive valuation levels. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • SAFM's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, SAFM has a quick ratio of 1.93, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Food Products industry and the overall market, SANDERSON FARMS INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • SAFM, with its decline in revenue, slightly underperformed the industry average of 2.3%. 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.
  • SANDERSON FARMS INC's earnings per share declined by 31.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, SANDERSON FARMS INC increased its bottom line by earning $10.80 versus $5.67 in the prior year. For the next year, the market is expecting a contraction of 10.0% in earnings ($9.72 versus $10.80).

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