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CBS Corporation (CBS) Shows Signs Of Being Water-Logged And Getting Wetter

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 CBS Corporation ( CBS) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified CBS Corporation as such a stock due to the following factors:

  • CBS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $361.5 million.
  • CBS has traded 160,914 shares today.
  • CBS traded in a range 674.6% of the normal price range with a price range of $10.03.
  • CBS traded below its daily resistance level (quality: 27 days, meaning that the stock is crossing a resistance level set by the last 27 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on CBS:

CBS Corporation operates as a mass media company in the United States and internationally. It operates in five segments: Entertainment, Cable Networks, Publishing, Local Broadcasting, and Outdoor Americas. The stock currently has a dividend yield of 0.7%. CBS has a PE ratio of 22.4. Currently there are 18 analysts that rate CBS Corporation a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for CBS Corporation has been 5.2 million shares per day over the past 30 days. CBS has a market cap of $37.2 billion and is part of the services sector and media industry. The stock has a beta of 1.81 and a short float of 2.5% with 2.58 days to cover. Shares are up 3.5% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates CBS Corporation as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and notable return on equity. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:

  • CBS's revenue growth has slightly outpaced the industry average of 4.4%. Since the same quarter one year prior, revenues slightly increased by 5.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 51.59% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CBS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • CBS CORP has improved earnings per share by 22.6% 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, CBS CORP increased its bottom line by earning $3.01 versus $2.48 in the prior year. This year, the market expects an improvement in earnings ($3.48 versus $3.01).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Media industry average. The net income increased by 19.6% when compared to the same quarter one year prior, going from $393.00 million to $470.00 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Media industry and the overall market, CBS CORP's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.

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