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

  • HLS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.9 million.
  • HLS has traded 263,841 shares today.
  • HLS traded in a range 216.5% of the normal price range with a price range of $1.25.
  • HLS traded above its daily resistance level (quality: 91 days, meaning that the stock is crossing a resistance level set by the last 91 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 HLS:

HealthSouth Corporation owns and operates inpatient rehabilitation hospitals, home health agencies, and hospice agencies in the United States. The company provides specialized rehabilitative treatment on an inpatient and outpatient basis. The stock currently has a dividend yield of 2.4%. HLS has a PE ratio of 19. Currently there are 7 analysts that rate Healthsouth a buy, 2 analysts rate it a sell, and 1 rates it a hold.

The average volume for Healthsouth has been 597,900 shares per day over the past 30 days. Healthsouth has a market cap of $3.6 billion and is part of the health care sector and health services industry. The stock has a beta of 0.31 and a short float of 7.3% with 10.31 days to cover. Shares are up 15% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Healthsouth as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, good cash flow from operations, growth in earnings per share and notable return on equity. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 11.8%. Since the same quarter one year prior, revenues rose by 22.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Health Care Providers & Services industry average. The net income increased by 36.5% when compared to the same quarter one year prior, rising from $42.50 million to $58.00 million.
  • Net operating cash flow has significantly increased by 56.56% to $159.70 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 35.30%.
  • HEALTHSOUTH CORP has improved earnings per share by 38.6% 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, HEALTHSOUTH CORP reported lower earnings of $1.91 versus $2.23 in the prior year. This year, the market expects an improvement in earnings ($2.46 versus $1.91).
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Health Care Providers & Services industry and the overall market, HEALTHSOUTH CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.

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