Strong On High Relative Volume: CenturyLink (CTL)

Trade-Ideas LLC identified CenturyLink (CTL) as a strong on high relative volume candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

CenturyLink

(

CTL

) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified CenturyLink as such a stock due to the following factors:

  • CTL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $118.0 million.
  • CTL has traded 570,714 shares today.
  • CTL is trading at 3.31 times the normal volume for the stock at this time of day.
  • CTL is trading at a new high 3.03% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. 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. 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 CTL:

CenturyLink, Inc. provides various communications services to residential, business, governmental, and wholesale customers in the United States. It operates through two segments, Business and Consumer. The stock currently has a dividend yield of 7.6%. CTL has a PE ratio of 22. Currently there are 5 analysts that rate CenturyLink a buy, 1 analyst rates it a sell, and 9 rate it a hold.

The average volume for CenturyLink has been 5.1 million shares per day over the past 30 days. CenturyLink has a market cap of $16.0 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 1.14 and a short float of 6.7% with 8.23 days to cover. Shares are down 29.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates CenturyLink as a

hold

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • CENTURYLINK INC's earnings per share declined by 23.5% 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, CENTURYLINK INC turned its bottom line around by earning $1.35 versus -$0.43 in the prior year. This year, the market expects an improvement in earnings ($2.59 versus $1.35).
  • Even though the current debt-to-equity ratio is 1.40, it is still below the industry average, suggesting that this level of debt is acceptable within the Diversified Telecommunication Services industry. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.44 is very low and demonstrates very weak liquidity.
  • 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 greatly underperformed compared to the Diversified Telecommunication Services industry average. The net income has significantly decreased by 25.9% when compared to the same quarter one year ago, falling from $193.00 million to $143.00 million.

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