NEW YORK (TheStreet) -- Corning (GLW) - Get Report peaked early in 2015 and worked steadily lower before losses accelerated into an August low. Prices of GLW retested their August low at the end of September and then the picture changed.
In this first chart of GLW, above, we can see a bullish divergence in August and September between the price action and the momentum study. The On-Balance-Volume (OBV) line is in gear with prices rising nicely.
In this chart of GLW, we can see that the support that developed for GLW around $16 relates to the prior resistance at that level in 2013. The OBV line is positive, and the Moving Average Convergence Divergence oscillator is making a turnaround. We wouldn't bet that GLW starts a straight-up rally, but rather it moves up in fits and starts to retest the $22-$24 area by year's end. A sell stop just above $16 is suggested.
Separately, TheStreet Ratings team rates CORNING INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
We rate CORNING INC (GLW) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- GLW's debt-to-equity ratio is very low at 0.20 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.30, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for CORNING INC is rather high; currently it is at 51.58%. Regardless of GLW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GLW's net profit margin of 9.33% compares favorably to the industry average.
- GLW, with its decline in revenue, slightly underperformed the industry average of 5.4%. Since the same quarter one year prior, revenues fell by 10.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, CORNING INC's return on equity is below that of both the industry average and the S&P 500.
- CORNING INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, CORNING INC increased its bottom line by earning $1.73 versus $1.34 in the prior year. For the next year, the market is expecting a contraction of 19.1% in earnings ($1.40 versus $1.73).
- You can view the full analysis from the report here: GLW