Watch Out: Barbarians At The Gate For Interval Leisure Group (IILG)

Trade-Ideas LLC identified Interval Leisure Group ( IILG) 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 Interval Leisure Group as such a stock due to the following factors:

  • IILG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $41.0 million.
  • IILG has traded 5.5 million shares today.
  • IILG traded in a range 265.3% of the normal price range with a price range of $1.37.
  • IILG traded above its daily resistance level (quality: 127 days, meaning that the stock is crossing a resistance level set by the last 127 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 IILG:

Interval Leisure Group, Inc., together with its subsidiaries, provides non-traditional lodging covering a portfolio of leisure businesses from vacation exchange and rental to vacation ownership. The company operates through two segments, Exchange and Rental, and Vacation Ownership. The stock currently has a dividend yield of 3.4%. IILG has a PE ratio of 12. Currently there are 3 analysts that rate Interval Leisure Group a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Interval Leisure Group has been 1.6 million shares per day over the past 30 days. Interval Leisure Group has a market cap of $826.3 million and is part of the services sector and diversified services industry. The stock has a beta of 1.58 and a short float of 47.3% with 7.21 days to cover. Shares are down 10.5% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Interval Leisure Group as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and disappointing return on equity.

Highlights from the ratings report include:
  • IILG's revenue growth trails the industry average of 11.2%. Since the same quarter one year prior, revenues slightly increased by 0.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.91, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.43 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • Net operating cash flow has decreased to $40.11 million or 38.01% 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 company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Hotels, Restaurants & Leisure industry average, but is greater than that of the S&P 500. The net income has decreased by 12.2% when compared to the same quarter one year ago, dropping from $25.26 million to $22.18 million.

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