NEW YORK (TheStreet) -- Typical of news organizations, when Thomson Reuters (TRI) - Get Thomson Reuters Corporation Report reports on a stock, it aims to get the "story" behind any price movement, refusing to recognize that the marketplace discounts the news well in advance. Maybe people there should take a look at their own company's chart, first.
In this chart of TRI, above, we can see that rallies into the $41 to $43 area have failed several times in the past 12 months. The recent October/November decline has taken the share price of TRI back below the 50-day and 200-day moving averages. Selling has become more intense, the On-Balance-Volume (OBV) line is in a tailspin and the Moving Average Convergence Divergence (MACD) oscillator is bearish. A close below $39 could weaken the picture.
This chart of TRI, above, is weakening. Prices are below the 40-week average, the OBV line is softer and the MACD oscillator is on the defensive. Our first downside target is $36.
TheStreet Ratings team rates THOMSON-REUTERS CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
We rate THOMSON-REUTERS CORP (TRI) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, notable return on equity, reasonable valuation levels, good cash flow from operations and impressive record of earnings per share growth. We feel its strengths outweigh the fact that the company shows low profit margins.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 21.2% when compared to the same quarter one year prior, going from $231.00 million to $280.00 million.
- 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. In comparison to the other companies in the Media industry and the overall market, THOMSON-REUTERS CORP's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
- Net operating cash flow has increased to $665.00 million or 13.67% when compared to the same quarter last year. In addition, THOMSON-REUTERS CORP has also modestly surpassed the industry average cash flow growth rate of 6.93%.
- THOMSON-REUTERS CORP has improved earnings per share by 28.6% 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. During the past fiscal year, THOMSON-REUTERS CORP increased its bottom line by earning $2.36 versus $0.15 in the prior year.
- You can view the full analysis from the report here: TRI
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.