Trade-Ideas LLC identified Crown Holdings ( CCK) 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 Crown Holdings as such a stock due to the following factors:

  • CCK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $43.7 million.
  • CCK has traded 256,823 shares today.
  • CCK traded in a range 371.8% of the normal price range with a price range of $3.41.
  • CCK traded above its daily resistance level (quality: 161 days, meaning that the stock is crossing a resistance level set by the last 161 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 CCK:

Crown Holdings Inc. designs, manufactures, and sells packaging products for consumer goods in the Americas, Europe, and the Asia Pacific. CCK has a PE ratio of 17. Currently there are 4 analysts that rate Crown Holdings a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Crown Holdings has been 936,100 shares per day over the past 30 days. Crown has a market cap of $6.7 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.59 and a short float of 0.4% with 0.68 days to cover. Shares are down 2.6% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Crown Holdings as a hold. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income and notable return on equity. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • CROWN HOLDINGS INC reported significant earnings per share improvement 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, CROWN HOLDINGS INC increased its bottom line by earning $2.82 versus $2.78 in the prior year. This year, the market expects an improvement in earnings ($3.85 versus $2.82).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Containers & Packaging industry. The net income increased by 407.7% when compared to the same quarter one year prior, rising from $13.00 million to $66.00 million.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.3%. Since the same quarter one year prior, revenues slightly dropped by 4.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has decreased to $641.00 million or 29.01% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The debt-to-equity ratio is very high at 38.32 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, CCK has a quick ratio of 0.56, this demonstrates the lack of ability of the company to cover short-term liquidity needs.

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