Water-Logged And Getting Wetter: CommScope (COMM)
Trade-Ideas LLC identified
(
) 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 CommScope as such a stock due to the following factors:
- COMM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $34.5 million.
- COMM has traded 69,735 shares today.
- COMM traded in a range 288.6% of the normal price range with a price range of $2.09.
- COMM traded below its daily resistance level (quality: 28 days, meaning that the stock is crossing a resistance level set by the last 28 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 COMM:
CommScope Holding Company, Inc. provides infrastructure solutions for communications networks worldwide. Currently there are 9 analysts that rate CommScope a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for CommScope has been 1.5 million shares per day over the past 30 days. CommScope has a market cap of $6.1 billion and is part of the technology sector and telecommunications industry. Shares are up 21.6% year-to-date as of the close of trading on Tuesday.
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Analysis:
rates CommScope as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and generally higher debt management risk.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 1.2%. Since the same quarter one year prior, revenues rose by 38.6%. 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.
- Net operating cash flow has significantly increased by 9423.54% to $118.09 million when compared to the same quarter last year. In addition, COMMSCOPE HOLDING CO INC has also vastly surpassed the industry average cash flow growth rate of -3.97%.
- After a year of stock price fluctuations, the net result is that COMM's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. 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.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Communications Equipment industry and the overall market, COMMSCOPE HOLDING CO 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 Communications Equipment industry. The net income has significantly decreased by 68.1% when compared to the same quarter one year ago, falling from $39.48 million to $12.58 million.
- You can view the full CommScope Ratings Report.
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