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

  • CSC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $47.7 million.
  • CSC has traded 121,298 shares today.
  • CSC traded in a range 202.9% of the normal price range with a price range of $1.43.
  • CSC traded above its daily resistance level (quality: 25 days, meaning that the stock is crossing a resistance level set by the last 25 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 CSC:

Computer Sciences Corporation, together with its subsidiaries, provides information technology services and solutions primarily in North America, Europe, Asia, and Australia. It operates through two segments, Global Business Services (GBS) and Global Infrastructure Services (GIS). The stock currently has a dividend yield of 1.2%. CSC has a PE ratio of 95. Currently there are 2 analysts that rate Computer a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Computer has been 2.0 million shares per day over the past 30 days. Computer has a market cap of $6.6 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.98 and a short float of 4.6% with 6.60 days to cover. Shares are up 46.4% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Computer as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, solid stock price performance and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • COMPUTER SCIENCES CORP has improved earnings per share by 24.7% 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 year. We feel that this trend should continue. During the past fiscal year, COMPUTER SCIENCES CORP turned its bottom line around by earning $0.43 versus -$1.64 in the prior year. This year, the market expects an improvement in earnings ($2.85 versus $0.43).
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 27.54% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.8%. Since the same quarter one year prior, revenues slightly dropped by 5.4%. The declining revenue has not hurt the company's bottom line, with increasing 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. In comparison to the other companies in the IT Services industry and the overall market, COMPUTER SCIENCES CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The debt-to-equity ratio of 1.31 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, CSC's quick ratio is somewhat strong at 1.15, demonstrating the ability to handle short-term liquidity needs.

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