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

  • VA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $20.4 million.
  • VA has traded 362,038 shares today.
  • VA traded in a range 478.2% of the normal price range with a price range of $3.97.
  • VA traded above its daily resistance level (quality: 75 days, meaning that the stock is crossing a resistance level set by the last 75 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 VA:

Virgin America Inc. provides scheduled air travel services. The company has a fleet of 60 Airbus single-aisle aircraft consisting of 10 Airbus A319s and 50 Airbus A320s. As of December 31, 2015, it provided services to 23 airports in the United States and Mexico. VA has a PE ratio of 4. Currently there are 4 analysts that rate Virgin America a buy, 3 analysts rate it a sell, and 3 rate it a hold.

The average volume for Virgin America has been 713,800 shares per day over the past 30 days. Virgin America has a market cap of $1.4 billion and is part of the services sector and transportation industry. Shares are down 14.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Virgin America 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 notable return on equity. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 5.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.38, 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 1.24, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for VIRGIN AMERICA INC is rather low; currently it is at 24.88%. Regardless of VA's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, VA's net profit margin of 48.76% significantly outperformed against the industry.
  • VA has underperformed the S&P 500 Index, declining 12.96% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • Net operating cash flow has significantly decreased to $23.77 million or 76.46% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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