Watch Out: Barbarians At The Gate For Crown Holdings (CCK)

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 $47.2 million.
  • CCK has traded 130,344 shares today.
  • CCK traded in a range 202% of the normal price range with a price range of $1.93.
  • CCK traded above its daily resistance level (quality: 65 days, meaning that the stock is crossing a resistance level set by the last 65 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 3 rate it a hold.

The average volume for Crown Holdings has been 959,900 shares per day over the past 30 days. Crown has a market cap of $7.2 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 0.9% with 1.29 days to cover. Shares are up 3.1% 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 buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, growth in earnings per share and increase in net income. 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:
  • Compared to other companies in the Containers & Packaging industry and the overall market, CROWN HOLDINGS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • 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. 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 ($3.90 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 79.5% when compared to the same quarter one year prior, rising from $44.00 million to $79.00 million.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.4%. Since the same quarter one year prior, revenues slightly dropped by 5.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for CROWN HOLDINGS INC is rather low; currently it is at 19.65%. Regardless of CCK's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CCK's net profit margin of 4.17% compares favorably to the industry average.

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