Trade-Ideas LLC identified

T-Mobile US

(

TMUS

) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) 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 $125.7 million.
  • TMUS has traded 1.4 million shares today.
  • TMUS traded in a range 239.8% of the normal price range with a price range of $2.52.
  • TMUS traded below its daily resistance level (quality: 12 days, meaning that the stock is crossing a resistance level set by the last 12 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on TMUS:

TheStreet Recommends

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 125. 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 3.4 million shares per day over the past 30 days. T-Mobile US has a market cap of $33.6 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 0.89 and a short float of 7.4% with 6.33 days to cover. Shares are up 53.2% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates T-Mobile US as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins, solid stock price performance and notable return on equity. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • TMUS's revenue growth has slightly outpaced the industry average of 12.2%. Since the same quarter one year prior, revenues rose by 13.8%. 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 increased to $1,161.00 million or 19.69% when compared to the same quarter last year. In addition, T-MOBILE US INC has also vastly surpassed the industry average cash flow growth rate of -54.84%.
  • The gross profit margin for T-MOBILE US INC is rather high; currently it is at 50.39%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, TMUS's net profit margin of 4.41% significantly trails the industry average.
  • Compared to its closing price of one year ago, TMUS's share price has jumped by 49.50%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • T-MOBILE US INC's earnings per share declined by 12.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. 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 ($0.98 versus $0.29).

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