Trade-Ideas: Crown Castle International (CCI) Is Today's Weak On High Relative Volume Stock

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 or Stephanie Link.

Trade-Ideas LLC identified Crown Castle International ( CCI) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Crown Castle International as such a stock due to the following factors:

  • CCI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $162.2 million.
  • CCI has traded 421,338 shares today.
  • CCI is trading at 2.31 times the normal volume for the stock at this time of day.
  • CCI is trading at a new low 3.01% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. 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 (or avoid losses by trimming weak positions). 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 CCI:

Crown Castle International Corp., together with is subsidiaries, owns, operates, and leases shared wireless infrastructure primarily in the United States, Puerto Rico, and Australia. CCI has a PE ratio of 147.8. Currently there are 12 analysts that rate Crown Castle International a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Crown Castle International has been 2.4 million shares per day over the past 30 days. Crown Castle International has a market cap of $22.6 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 0.36 and a short float of 1.5% with 2.68 days to cover. Shares are up 6.5% year to date as of the close of trading on Wednesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Crown Castle International 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 solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 1.6%. Since the same quarter one year prior, revenues rose by 34.1%. 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 76.69% to $286.63 million when compared to the same quarter last year. In addition, CROWN CASTLE INTL CORP has also vastly surpassed the industry average cash flow growth rate of -18.91%.
  • Compared to its closing price of one year ago, CCI's share price has jumped by 29.93%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Wireless Telecommunication Services industry and the overall market, CROWN CASTLE INTL CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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