Trade-Ideas LLC identified

SBA Communications

(

SBAC

) 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 SBA Communications as such a stock due to the following factors:

  • SBAC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $143.6 million.
  • SBAC has traded 480,054 shares today.
  • SBAC traded in a range 228.3% of the normal price range with a price range of $3.74.
  • SBAC traded above its daily resistance level (quality: 20 days, meaning that the stock is crossing a resistance level set by the last 20 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 SBAC:

SBA Communications Corporation owns and operates wireless communications tower structures, rooftops, and other structures that support antennas used for wireless communications in the United States and its territories, South America, Central America, and Canada. Currently there are 8 analysts that rate SBA Communications a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for SBA Communications has been 1.1 million shares per day over the past 30 days. SBA has a market cap of $12.5 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 0.91 and a short float of 2.3% with 2.71 days to cover. Shares are down 6.4% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates SBA Communications as a

hold

. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, expanding profit margins and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Telecommunication Services industry. The net income increased by 167.9% when compared to the same quarter one year prior, rising from -$79.03 million to $53.64 million.
  • The gross profit margin for SBA COMMUNICATIONS CORP is currently very high, coming in at 74.34%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 13.41% is above that of the industry average.
  • SBA COMMUNICATIONS CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SBA COMMUNICATIONS CORP reported poor results of -$1.38 versus -$0.19 in the prior year. This year, the market expects an improvement in earnings ($0.87 versus -$1.38).
  • SBAC has underperformed the S&P 500 Index, declining 12.61% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Net operating cash flow has decreased to $144.86 million or 18.80% when compared to the same quarter last year. Despite a decrease in cash flow of 18.80%, SBA COMMUNICATIONS CORP is in line with the industry average cash flow growth rate of -18.87%.

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