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Liberty Global (LBTYK) Stock Storming The Castle Today

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 Liberty Global ( LBTYK) 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 Liberty Global as such a stock due to the following factors:

  • LBTYK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $111.3 million.
  • LBTYK has traded 4.7 million shares today.
  • LBTYK is trading at 1.75 times the normal volume for the stock at this time of day.
  • LBTYK 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.

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More details on LBTYK:

Liberty Global plc, together with its subsidiaries, provides video, broadband Internet, fixed-line telephony, and mobile services in Europe, Chile, Puerto Rico, and internationally.

The average volume for Liberty Global has been 3.7 million shares per day over the past 30 days. Liberty Global has a market cap of $12.2 billion and is part of the services sector and media industry. The stock has a beta of 1.37 and a short float of 9.2% with 9.88 days to cover. Shares are down 10% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Liberty Global as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in stock price during the past year and increase in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:

  • LBTYK's very impressive revenue growth greatly exceeded the industry average of 3.9%. Since the same quarter one year prior, revenues leaped by 63.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • LIBERTY GLOBAL PLC 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, LIBERTY GLOBAL PLC reported poor results of -$1.19 versus -$1.17 in the prior year. This year, the market expects an improvement in earnings ($0.05 versus -$1.19).
  • 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 Media industry and the overall market, LIBERTY GLOBAL PLC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Although LBTYK's debt-to-equity ratio of 3.72 is very high, it is currently less than that of the industry average. To add to this, LBTYK has a quick ratio of 0.56, this demonstrates the lack of ability of the company to cover short-term liquidity needs.

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