Barbarian At The Gate: Liberty Global (LBTYA)
Trade-Ideas LLC identified
(
) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Liberty Global as such a stock due to the following factors:
- LBTYA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $66.9 million.
- LBTYA has traded 703,833 shares today.
- LBTYA traded in a range 216% of the normal price range with a price range of $1.75.
- LBTYA traded above its daily resistance level (quality: 6 days, meaning that the stock is crossing a resistance level set by the last 6 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.
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More details on LBTYA:
Liberty Global plc, together with its subsidiaries, provides video, broadband Internet, fixed-line telephony, and mobile services in Europe, Chile, and Puerto Rico. Currently there are 6 analysts that rate Liberty Global a buy, no analysts rate it a sell, and none rate it a hold.
The average volume for Liberty Global has been 2.4 million shares per day over the past 30 days. Liberty Global has a market cap of $31.4 billion and is part of the services sector and media industry. The stock has a beta of 1.72 and a short float of 2.4% with 3.37 days to cover. Shares are down 12.1% year-to-date as of the close of trading on Friday.
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Analysis:
rates Liberty Global as a
. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- The debt-to-equity ratio is very high at 4.28 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.24, which clearly demonstrates the inability to cover short-term cash needs.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Media industry and the overall market, LIBERTY GLOBAL PLC GLOBAL GP's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has declined marginally to $1,441.60 million or 6.55% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- LBTYA's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 25.75%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- LBTYA, with its decline in revenue, underperformed when compared the industry average of 9.7%. Since the same quarter one year prior, revenues slightly dropped by 7.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full Liberty Global Ratings Report.
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