Trade-Ideas LLC identified

Scripps Networks Interactive

(

SNI

) 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 Scripps Networks Interactive as such a stock due to the following factors:

  • SNI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $109.9 million.
  • SNI has traded 1.3 million shares today.
  • SNI is trading at 2.42 times the normal volume for the stock at this time of day.
  • SNI 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 SNI:

Scripps Networks Interactive, Inc. develops lifestyle-oriented content for linear and interactive video platforms in the United States, the United Kingdom and other European markets, the Middle East and Africa, the Asia-Pacific, and Latin America. The stock currently has a dividend yield of 1.8%. SNI has a PE ratio of 13. Currently there are 4 analysts that rate Scripps Networks Interactive a buy, no analysts rate it a sell, and 9 rate it a hold.

The average volume for Scripps Networks Interactive has been 1.4 million shares per day over the past 30 days. Scripps Networks Interactive has a market cap of $7.1 billion and is part of the services sector and media industry. The stock has a beta of 1.36 and a short float of 13.3% with 6.12 days to cover. Shares are up 1.1% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Scripps Networks Interactive as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and generally higher debt management risk.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 7.4%. Since the same quarter one year prior, revenues rose by 20.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Media industry and the overall market, SCRIPPS NETWORKS INTERACTIVE's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has slightly increased to $271.95 million or 2.88% when compared to the same quarter last year. Despite an increase in cash flow, SCRIPPS NETWORKS INTERACTIVE's average is still marginally south of the industry average growth rate of 12.51%.
  • The debt-to-equity ratio is very high at 2.80 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, SNI has managed to keep a strong quick ratio of 2.01, which demonstrates the ability to cover short-term cash needs.
  • SNI has underperformed the S&P 500 Index, declining 23.88% 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.

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