Barbarian At The Gate: IPG Photonics (IPGP)

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

  • IPGP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $24.8 million.
  • IPGP has traded 155,249 shares today.
  • IPGP traded in a range 212.8% of the normal price range with a price range of $3.78.
  • IPGP traded above its daily resistance level (quality: 309 days, meaning that the stock is crossing a resistance level set by the last 309 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 IPGP:

IPG Photonics Corporation develops and manufactures a range of high-performance fiber lasers, fiber amplifiers, and diode lasers used in various applications, primarily in materials processing worldwide. IPGP has a PE ratio of 21. Currently there are 6 analysts that rate IPG Photonics a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for IPG Photonics has been 386,200 shares per day over the past 30 days. IPG Photonics has a market cap of $5.0 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.96 and a short float of 9.5% with 12.32 days to cover. Shares are up 6% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates IPG Photonics as a buy. 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, notable return on equity, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • IPGP's revenue growth has slightly outpaced the industry average of 0.4%. Since the same quarter one year prior, revenues slightly increased by 7.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • IPGP's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 5.79, which clearly demonstrates the ability to cover short-term cash needs.
  • 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 Electronic Equipment, Instruments & Components industry and the overall market, IPG PHOTONICS CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for IPG PHOTONICS CORP is rather high; currently it is at 59.64%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.14% significantly outperformed against the industry average.
  • Net operating cash flow has increased to $61.96 million or 10.60% when compared to the same quarter last year. In addition, IPG PHOTONICS CORP has also modestly surpassed the industry average cash flow growth rate of 0.72%.

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