Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified

Twenty-First Century Fox

(

FOX

) 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 Twenty-First Century Fox as such a stock due to the following factors:

  • FOX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $71.6 million.
  • FOX has traded 1.9 million shares today.
  • FOX is trading at 1.95 times the normal volume for the stock at this time of day.
  • FOX 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 FOX:

Twenty-First Century Fox, Inc. operates as a diversified media and entertainment company worldwide. It operates through Cable Network Programming, Television, Filmed Entertainment, and Direct Broadcast Satellite Television segments. The stock currently has a dividend yield of 0.9%. FOX has a PE ratio of 18.2. Currently there are 2 analysts that rate Twenty-First Century Fox a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Twenty-First Century Fox has been 2.7 million shares per day over the past 30 days. Twenty-First Century Fox has a market cap of $26.4 billion and is part of the services sector and media industry. The stock has a beta of 1.33 and a short float of 0.7% with 1.57 days to cover. Shares are down 10.2% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Twenty-First Century Fox as a

buy

. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, notable return on equity, attractive valuation levels and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • 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 414.3% when compared to the same quarter one year prior, rising from $1,207.00 million to $6,207.00 million.
  • The debt-to-equity ratio is somewhat low, currently at 0.97, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, FOX has a quick ratio of 2.31, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 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, TWENTY-FIRST CENTURY FOX INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

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