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

  • EMC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $344.1 million.
  • EMC has traded 22.5 million shares today.
  • EMC traded in a range 219.3% of the normal price range with a price range of $0.86.
  • EMC traded above its daily resistance level (quality: 7 days, meaning that the stock is crossing a resistance level set by the last 7 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 EMC:

EMC Corporation develops, delivers, and supports information infrastructure and virtual infrastructure technologies, solutions, and services. The stock currently has a dividend yield of 1.9%. EMC has a PE ratio of 21. Currently there are 11 analysts that rate EMC a buy, no analysts rate it a sell, and 13 rate it a hold.

The average volume for EMC has been 13.6 million shares per day over the past 30 days. EMC has a market cap of $46.9 billion and is part of the technology sector and computer hardware industry. The stock has a beta of 1.03 and a short float of 0.5% with 0.77 days to cover. Shares are down 3.9% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates EMC as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and weak operating cash flow.

Highlights from the ratings report include:
  • EMC's revenue growth trails the industry average of 25.6%. Since the same quarter one year prior, revenues slightly increased by 0.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The current debt-to-equity ratio, 0.36, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.88 is somewhat weak and could be cause for future problems.
  • The gross profit margin for EMC CORP/MA is rather high; currently it is at 68.23%. Regardless of EMC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, EMC's net profit margin of 7.89% is significantly lower than the industry average.
  • Net operating cash flow has decreased to $1,403.00 million or 17.47% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, EMC has underperformed the S&P 500 Index, declining 16.46% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

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