Trade-Ideas LLC identified

Dreamworks Animation SKG

(

DWA

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Dreamworks Animation SKG as such a stock due to the following factors:

  • DWA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $39.6 million.
  • DWA has traded 110,177 shares today.
  • DWA is down 3.3% today.
  • DWA was up 21.7% yesterday.

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More details on DWA:

DreamWorks Animation SKG, Inc. engages in the development, production, and exploitation of animated films and their associated characters worldwide. The company operates in four segments: Feature Films, Television Series and Specials, Consumer Products, and New Media. Currently there are 4 analysts that rate Dreamworks Animation SKG a buy, 4 analysts rate it a sell, and 1 rates it a hold.

The average volume for Dreamworks Animation SKG has been 851,300 shares per day over the past 30 days. Dreamworks Animation SKG has a market cap of $1.8 billion and is part of the services sector and media industry. The stock has a beta of 1.06 and a short float of 29.9% with 6.22 days to cover. Shares are down 0.5% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Dreamworks Animation SKG as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

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 36.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.31, is low and is below the industry average, implying that there has been successful management of debt levels.
  • Compared to where it was trading a year ago, DWA's share price has not changed very much due to (a) the relatively weak year-over-year performance of the overall market, (b) the company's stagnant earnings, and (c) other mixed results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • 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. Compared to other companies in the Media industry and the overall market, DREAMWORKS ANIMATION INC's return on equity significantly trails that of both the industry average and the S&P 500.

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