Discovery Communications (DISCA) Stock Storming The Castle Today
Trade-Ideas LLC identified
(
) 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 Discovery Communications as such a stock due to the following factors:
- DISCA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $84.1 million.
- DISCA has traded 2.5 million shares today.
- DISCA is trading at 3.33 times the normal volume for the stock at this time of day.
- DISCA 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 DISCA with the Ticky from Trade-Ideas. See the FREE profile for DISCA NOW at Trade-Ideas
More details on DISCA:
Discovery Communications, Inc. operates as a media company. The company operates through U.S. Networks; International Networks; and Education and Other segments. DISCA has a PE ratio of 18. Currently there are 3 analysts that rate Discovery Communications a buy, 1 analyst rates it a sell, and 14 rate it a hold.
The average volume for Discovery Communications has been 3.9 million shares per day over the past 30 days. Discovery has a market cap of $4.4 billion and is part of the services sector and media industry. The stock has a beta of 1.70 and a short float of 15.8% with 8.57 days to cover. Shares are down 12.7% year-to-date as of the close of trading on Monday.
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.
Analysis:
rates Discovery Communications as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 5.6%. Since the same quarter one year prior, revenues slightly increased by 2.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Even though the current debt-to-equity ratio is 1.31, it is still below the industry average, suggesting that this level of debt is acceptable within the Media industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.10 is sturdy.
- The share price of DISCOVERY COMMUNICATIONS INC has not done very well: it is down 20.67% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Media industry average. The net income has decreased by 24.5% when compared to the same quarter one year ago, dropping from $379.00 million to $286.00 million.
- You can view the full Discovery Communications Ratings Report.
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.