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

  • OI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $34.5 million.
  • OI has traded 1.9 million shares today.
  • OI traded in a range 201.6% of the normal price range with a price range of $1.35.
  • OI traded above its daily resistance level (quality: 11 days, meaning that the stock is crossing a resistance level set by the last 11 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 OI:

Owens-Illinois, Inc., through its subsidiaries, manufactures and sells glass container products to food and beverage manufacturers primarily in Europe, North America, Latin America, and the Asia Pacific. Currently there are 2 analysts that rate Owens-Illinois a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Owens-Illinois has been 2.0 million shares per day over the past 30 days. Owens-Illinois has a market cap of $2.1 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.77 and a short float of 3.8% with 2.33 days to cover. Shares are down 29.3% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Owens-Illinois as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Containers & Packaging industry. The net income has significantly decreased by 71.7% when compared to the same quarter one year ago, falling from $60.00 million to $17.00 million.
  • The debt-to-equity ratio is very high at 7.63 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, OI maintains a poor quick ratio of 0.72, which illustrates the inability to avoid short-term cash problems.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Containers & Packaging industry and the overall market, OWENS-ILLINOIS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for OWENS-ILLINOIS INC is rather low; currently it is at 24.58%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.08% trails that of the industry average.
  • Net operating cash flow has declined marginally to $215.00 million or 2.27% when compared to the same quarter last year. Despite a decrease in cash flow of 2.27%, OWENS-ILLINOIS INC is in line with the industry average cash flow growth rate of -11.21%.

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