Trade-Ideas LLC identified

T-Mobile US

(

TMUS

) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified T-Mobile US as such a stock due to the following factors:

  • TMUS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $271.6 million.
  • TMUS has a PE ratio of 65.
  • TMUS is currently in the upper 30% of its 1-year range.
  • TMUS is in the upper 25% of its 20-day range.
  • TMUS is in the upper 35% of its 5-day range.
  • TMUS is currently trading above yesterday's high.
  • TMUS has experienced a gap between today's open and yesterday's close of 0.6%.

'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.

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More details on TMUS:

T-Mobile US, Inc., together with its subsidiaries, provides mobile communications services in the United States, Puerto Rico, and the U.S. Virgin Islands. The company offers voice, messaging, and data services in the postpaid, prepaid, and wholesale markets. TMUS has a PE ratio of 65. Currently there are 14 analysts that rate T-Mobile US a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for T-Mobile US has been 4.9 million shares per day over the past 30 days. T-Mobile US has a market cap of $31.8 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 0.47 and a short float of 7% with 2.83 days to cover. Shares are up 45.7% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates T-Mobile US as a

hold

. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:

  • T-MOBILE US INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, T-MOBILE US INC turned its bottom line around by earning $0.29 versus -$0.10 in the prior year. This year, the market expects an improvement in earnings ($0.74 versus $0.29).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Wireless Telecommunication Services industry. The net income increased by 246.8% when compared to the same quarter one year prior, rising from -$94.00 million to $138.00 million.
  • Powered by its strong earnings growth of 225.00% and other important driving factors, this stock has surged by 56.17% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Wireless Telecommunication Services industry and the overall market on the basis of return on equity, T-MOBILE US INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Currently the debt-to-equity ratio of 1.53 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, TMUS maintains a poor quick ratio of 0.89, which illustrates the inability to avoid short-term cash problems.

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