Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
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 Discovery Communications as such a stock due to the following factors:
- DISCK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $52.0 million.
- DISCK has traded 1.9 million shares today.
- DISCK traded in a range 350.5% of the normal price range with a price range of $3.81.
- DISCK traded below its daily resistance level (quality: 312 days, meaning that the stock is crossing a resistance level set by the last 312 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 DISCK:
Discovery Communications, Inc. operates as a media company worldwide. The company operates in three segments: U.S. Networks, International Networks, and Education. DISCK has a PE ratio of 25.6. Currently there are no analysts that rate Discovery Communications a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for Discovery Communications has been 472,800 shares per day over the past 30 days. Discovery has a market cap of $5.7 billion and is part of the services sector and media industry. The stock has a beta of 1.16 and a short float of 1.9% with 1.38 days to cover. Shares are down 14.7% year-to-date as of the close of trading on Monday.
rates Discovery Communications as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, notable return on equity, good cash flow from operations and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 5.1%. Since the same quarter one year prior, revenues rose by 28.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- DISCOVERY COMMUNICATIONS INC has improved earnings per share by 32.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, DISCOVERY COMMUNICATIONS INC increased its bottom line by earning $2.97 versus $2.52 in the prior year. This year, the market expects an improvement in earnings ($11.10 versus $2.97).
- 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. Compared to other companies in the Media industry and the overall market, DISCOVERY COMMUNICATIONS INC's return on equity exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has slightly increased to $355.00 million or 8.23% when compared to the same quarter last year. In addition, DISCOVERY COMMUNICATIONS INC has also modestly surpassed the industry average cash flow growth rate of 3.44%.
- The net income growth from the same quarter one year ago has exceeded that of the Media industry average, but is less than that of the S&P 500. The net income increased by 29.0% when compared to the same quarter one year prior, rising from $224.00 million to $289.00 million.
- You can view the full Discovery Communications Ratings Report.