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

Sinclair Broadcast Group

(

SBGI

) 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 Sinclair Broadcast Group as such a stock due to the following factors:

  • SBGI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $51.4 million.
  • SBGI has traded 385,606 shares today.
  • SBGI traded in a range 309.7% of the normal price range with a price range of $3.43.
  • SBGI traded above its daily resistance level (quality: 159 days, meaning that the stock is crossing a resistance level set by the last 159 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 SBGI:

Sinclair Broadcast Group, Inc., a diversified television broadcasting company, owns and operates, programs, or provides sales services to television stations in the United States. The stock currently has a dividend yield of 2%. SBGI has a PE ratio of 40.0. Currently there are 4 analysts that rate Sinclair Broadcast Group a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Sinclair Broadcast Group has been 1.5 million shares per day over the past 30 days. Sinclair Broadcast Group has a market cap of $2.1 billion and is part of the services sector and media industry. The stock has a beta of 2.23 and a short float of 20.1% with 7.94 days to cover. Shares are down 18.2% year-to-date as of the close of trading on Tuesday.

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 Sinclair Broadcast Group as a

hold

. The company's strengths can be seen in multiple areas, such as its notable return on equity, robust revenue growth and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including relatively poor performance when compared with the S&P 500 during the past year and generally higher debt management risk.

Highlights from the ratings report include:

  • In comparison to the other companies in the Media industry and the overall market, SINCLAIR BROADCAST GP's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • The revenue growth greatly exceeded the industry average of 14.6%. Since the same quarter one year prior, revenues rose by 46.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • SINCLAIR BROADCAST GP has improved earnings per share by 35.0% 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, SINCLAIR BROADCAST GP reported lower earnings of $0.66 versus $1.77 in the prior year. This year, the market expects an improvement in earnings ($1.96 versus $0.66).
  • In its most recent trading session, SBGI has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • The debt-to-equity ratio is very high at 9.10 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, SBGI has managed to keep a strong quick ratio of 1.52, which demonstrates the ability to cover short-term cash 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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