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.

Trade-Ideas LLC identified

Twenty-First Century Fox

(

FOXA

) 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 Twenty-First Century Fox as such a stock due to the following factors:

  • FOXA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $358.9 million.
  • FOXA has traded 8.4 million shares today.
  • FOXA is trading at 2.67 times the normal volume for the stock at this time of day.
  • FOXA 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 FOXA:

Twenty-First Century Fox, Inc. operates as a diversified media and entertainment company worldwide. It operates through Cable Network Programming, Television, Filmed Entertainment, and Direct Broadcast Satellite Television segments. The stock currently has a dividend yield of 0.9%. FOXA has a PE ratio of 8. Currently there are 12 analysts that rate Twenty-First Century Fox a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Twenty-First Century Fox has been 13.1 million shares per day over the past 30 days. Twenty-First Century Fox has a market cap of $42.8 billion and is part of the services sector and media industry. The stock has a beta of 1.54 and a short float of 3.5% with 4.61 days to cover. Shares are down 11.4% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Twenty-First Century Fox as a

buy

. The company's strengths can be seen in multiple areas, such as its notable return on equity, attractive valuation levels, expanding profit margins, good cash flow from operations and increase in stock price during the past year. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Media industry and the overall market, TWENTY-FIRST CENTURY FOX INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • 36.30% is the gross profit margin for TWENTY-FIRST CENTURY FOX INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 14.25% is above that of the industry average.
  • Net operating cash flow has significantly increased by 53.66% to $1,761.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 13.98%.
  • After a year of stock price fluctuations, the net result is that FOXA'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. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

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