Trade-Ideas LLC identified

Level 3 Communications

(

LVLT

) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Level 3 Communications as such a stock due to the following factors:

  • LVLT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $120.9 million.
  • LVLT has traded 1085.80999999999994543031789362430572509765625 options contracts today.
  • LVLT is making at least a new 3-day high.
  • LVLT has a PE ratio of 106.
  • LVLT is mentioned 1.68 times per day on StockTwits.
  • LVLT has not yet been mentioned on StockTwits today.
  • LVLT is currently in the upper 20% of its 1-year range.
  • LVLT is in the upper 35% of its 20-day range.
  • LVLT is in the upper 45% of its 5-day range.
  • LVLT is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on LVLT:

Level 3 Communications, Inc., together with its subsidiaries, operates as a facilities-based provider of a range of integrated communications services primarily in North America, Latin America, Europe, the Middle East, and Africa. LVLT has a PE ratio of 106. Currently there are 11 analysts that rate Level 3 Communications a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Level 3 Communications has been 2.2 million shares per day over the past 30 days. Level 3 has a market cap of $18.5 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 1.41 and a short float of 2% with 2.06 days to cover. Shares are up 6.7% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Level 3 Communications as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 10.4%. Since the same quarter one year prior, revenues rose by 26.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 79.12% to $575.00 million when compared to the same quarter last year. In addition, LEVEL 3 COMMUNICATIONS INC has also vastly surpassed the industry average cash flow growth rate of 16.26%.
  • 47.87% is the gross profit margin for LEVEL 3 COMMUNICATIONS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 0.04% trails the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Diversified Telecommunication Services industry. The net income has significantly decreased by 98.8% when compared to the same quarter one year ago, falling from $85.00 million to $1.00 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Diversified Telecommunication Services industry and the overall market, LEVEL 3 COMMUNICATIONS INC's return on equity significantly trails that of both the industry average and the S&P 500.

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