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

  • ABC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $185.5 million.
  • ABC has traded 1.0 million shares today.
  • ABC traded in a range 210.2% of the normal price range with a price range of $1.87.
  • ABC traded above its daily resistance level (quality: 30 days, meaning that the stock is crossing a resistance level set by the last 30 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 ABC:

AmerisourceBergen Corporation sources and distributes pharmaceutical products to healthcare providers, pharmaceutical and biotech manufacturers, and specialty drug patients in the United States and internationally. The stock currently has a dividend yield of 1.8%. ABC has a PE ratio of 6. Currently there are 2 analysts that rate AmerisourceBergen a buy, no analysts rate it a sell, and 10 rate it a hold.

The average volume for AmerisourceBergen has been 2.6 million shares per day over the past 30 days. AmerisourceBergen has a market cap of $16.5 billion and is part of the services sector and wholesale industry. The stock has a beta of 0.72 and a short float of 5.3% with 3.87 days to cover. Shares are down 26.6% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates AmerisourceBergen as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, compelling growth in net income, impressive record of earnings per share growth and good cash flow from operations. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • ABC's revenue growth has slightly outpaced the industry average of 8.6%. Since the same quarter one year prior, revenues slightly increased by 9.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Health Care Providers & Services industry and the overall market, AMERISOURCEBERGEN CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 217.7% when compared to the same quarter one year prior, rising from -$513.39 million to $604.14 million.
  • Net operating cash flow has increased to $879.74 million or 18.60% when compared to the same quarter last year. Despite an increase in cash flow, AMERISOURCEBERGEN CORP's average is still marginally south of the industry average growth rate of 19.92%.
  • AMERISOURCEBERGEN CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AMERISOURCEBERGEN CORP swung to a loss, reporting -$0.79 versus $1.20 in the prior year. This year, the market expects an improvement in earnings ($5.50 versus -$0.79).

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