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

America Movil SAB de CV

(

AMX

) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified America Movil SAB de CV as such a stock due to the following factors:

  • AMX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $83.2 million.
  • AMX has traded 10.0 million shares today.
  • AMX is trading at 3.12 times the normal volume for the stock at this time of day.
  • AMX crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. 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 on. 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 AMX:

America Movil, S.A.B. de C.V. provides telecommunications services in the United States, Latin America, and the Caribbean. The stock currently has a dividend yield of 1.7%. AMX has a PE ratio of 12.4. Currently there is 1 analyst that rates America Movil SAB de CV a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for America Movil SAB de CV has been 4.9 million shares per day over the past 30 days. America Movil SAB de CV has a market cap of $69.9 billion and is part of the technology sector and telecommunications industry. Shares are down 15.8% year-to-date as of the close of trading on Thursday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates America Movil SAB de CV as a

hold

. The company's strengths can be seen in multiple areas, such as its expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and relatively poor performance when compared with the S&P 500 during the past year.

Highlights from the ratings report include:

  • The gross profit margin for AMERICA MOVIL SA DE CV is rather high; currently it is at 54.70%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, AMX's net profit margin of 7.10% significantly trails the industry average.
  • AMX, with its decline in revenue, slightly underperformed the industry average of 2.5%. Since the same quarter one year prior, revenues slightly dropped by 4.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Wireless Telecommunication Services industry and the overall market, AMERICA MOVIL SA DE CV's return on equity significantly exceeds 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 Wireless Telecommunication Services industry. The net income has significantly decreased by 51.3% when compared to the same quarter one year ago, falling from $2,181.87 million to $1,063.63 million.
  • The debt-to-equity ratio is very high at 2.38 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, AMX has a quick ratio of 0.59, this demonstrates the lack of ability of the company to cover short-term liquidity needs.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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