Barbarian At The Gate: GATX (GMT)

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

  • GMT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $31.3 million.
  • GMT has traded 639,964 shares today.
  • GMT traded in a range 205.3% of the normal price range with a price range of $3.63.
  • GMT traded above its daily resistance level (quality: 212 days, meaning that the stock is crossing a resistance level set by the last 212 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 GMT:

GATX Corporation leases, operates, manages, and remarkets assets in the rail and marine markets in North America and internationally. The company operates in four segments: Rail North America, Rail International, American Steamship Company (ASC), and Portfolio Management. The stock currently has a dividend yield of 3.4%. GMT has a PE ratio of 1. Currently there are 2 analysts that rate GATX a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for GATX has been 584,400 shares per day over the past 30 days. GATX has a market cap of $2.0 billion and is part of the services sector and diversified services industry. The stock has a beta of 1.03 and a short float of 20.7% with 11.82 days to cover. Shares are up 11.3% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates GATX as a hold. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • GATX CORP has improved earnings per share by 5.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, GATX CORP increased its bottom line by earning $4.70 versus $4.49 in the prior year. This year, the market expects an improvement in earnings ($5.35 versus $4.70).
  • 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 Trading Companies & Distributors industry and the overall market on the basis of return on equity, GATX CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • GMT has underperformed the S&P 500 Index, declining 23.61% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The debt-to-equity ratio is very high at 3.28 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.

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