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

  • HXL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $37.9 million.
  • HXL has traded 443,104 shares today.
  • HXL traded in a range 232% of the normal price range with a price range of $3.34.
  • HXL traded above its daily resistance level (quality: 9 days, meaning that the stock is crossing a resistance level set by the last 9 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 HXL:

Hexcel Corporation, together with its subsidiaries, develops, manufactures, and markets structural materials for use in commercial aerospace, space and defense, and industrial markets in the United States and internationally. The stock currently has a dividend yield of 1%. HXL has a PE ratio of 16. Currently there are 6 analysts that rate Hexcel a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Hexcel has been 584,500 shares per day over the past 30 days. Hexcel has a market cap of $3.7 billion and is part of the industrial goods sector and aerospace/defense industry. The stock has a beta of 1.00 and a short float of 7.7% with 8.25 days to cover. Shares are down 17% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Hexcel 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, good cash flow from operations and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.08, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has increased to $114.10 million or 40.00% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 20.09%.
  • HEXCEL CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, HEXCEL CORP increased its bottom line by earning $2.12 versus $1.85 in the prior year. This year, the market expects an improvement in earnings ($2.30 versus $2.12).
  • 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. Compared to other companies in the Aerospace & Defense industry and the overall market on the basis of return on equity, HEXCEL CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • HXL, with its decline in revenue, slightly underperformed the industry average of 1.5%. Since the same quarter one year prior, revenues slightly dropped by 0.7%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

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