Trade-Ideas: Altria Group (MO) Is Today's "Storm The Castle" Stock
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.Trade-Ideas LLC identified Altria Group (MO) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Altria Group as such a stock due to the following factors:
- MO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $223.7 million.
- MO has traded 5.9 million shares today.
- MO is trading at 89.58 times the normal volume for the stock at this time of day.
- MO crossed above its 200-day simple moving average.
'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.EXCLUSIVE OFFER: Get the inside scoop on opportunities in MO with the Ticky from Trade-Ideas. See the FREE profile for MO NOW at Trade-IdeasMore details on MO: Altria Group, Inc., through its subsidiaries, engages in the manufacture and sale of cigarettes, smokeless products, and wine in the United States and internationally. The stock currently has a dividend yield of 5.5%. MO has a PE ratio of 16.0. Currently there are 6 analysts that rate Altria Group a buy, no analysts rate it a sell, and 6 rate it a hold.The average volume for Altria Group has been 8.6 million shares per day over the past 30 days. Altria Group has a market cap of $70.3 billion and is part of the consumer goods sector and tobacco industry. The stock has a beta of 0.34 and a short float of 0.9% with 2.44 days to cover. Shares are up 11.6% year to date as of the close of trading on Friday.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.TheStreetRatings.com Analysis:TheStreet Quant Ratings rates Altria Group as a buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, notable return on equity, expanding profit margins, good cash flow from operations and increase in net income. We feel these 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:
- ALTRIA GROUP INC has improved earnings per share by 5.0% 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, ALTRIA GROUP INC increased its bottom line by earning $2.06 versus $1.64 in the prior year. This year, the market expects an improvement in earnings ($2.39 versus $2.06).
- 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 Tobacco industry and the overall market, ALTRIA GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for ALTRIA GROUP INC is rather high; currently it is at 57.47%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.97% is above that of the industry average.
- Net operating cash flow has increased to -$1,223.00 million or 36.36% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -8.60%.
- The net income growth from the same quarter one year ago has exceeded that of the Tobacco industry average, but is less than that of the S&P 500. The net income increased by 3.3% when compared to the same quarter one year prior, going from $1,225.00 million to $1,266.00 million.
- You can view the full Altria Group Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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