Perilous Reversal Watch: Cumulus Media (CMLS)
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 Cumulus Media (CMLS) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Cumulus Media as such a stock due to the following factors:
- CMLS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.6 million.
- CMLS has traded 663,654 shares today.
- CMLS is down 5.2% today.
- CMLS was up 10% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in CMLS with the Ticky from Trade-Ideas. See the FREE profile for CMLS NOW at Trade-IdeasMore details on CMLS: Cumulus Media Inc. owns and operates commercial radio station clusters in the United States. The company engages in the sale of local, regional, and national advertising for broadcast on its radio stations. As of March 18, 2013, it owned or operated 517 radio stations in 108 media markets. Currently there are 2 analysts that rate Cumulus Media a buy, no analysts rate it a sell, and none rate it a hold.The average volume for Cumulus Media has been 1.7 million shares per day over the past 30 days. Cumulus Media has a market cap of $1.1 billion and is part of the services sector and media industry. The stock has a beta of 1.88 and a short float of 14.4% with 3.68 days to cover. Shares are up 124% 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 Cumulus Media as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.Highlights from the ratings report include:
- CMLS's revenue growth has slightly outpaced the industry average of 6.4%. Since the same quarter one year prior, revenues slightly increased by 2.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Powered by its strong earnings growth of 200.00% and other important driving factors, this stock has surged by 143.08% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- CUMULUS MEDIA INC 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, CUMULUS MEDIA INC swung to a loss, reporting -$0.67 versus $0.04 in the prior year. This year, the market expects an improvement in earnings ($0.22 versus -$0.67).
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Media industry and the overall market, CUMULUS MEDIA INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Media industry. The net income has significantly decreased by 87.4% when compared to the same quarter one year ago, falling from $56.05 million to $7.04 million.
- You can view the full Cumulus Media 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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