Trade-Ideas: Tim Holding Company (TSU) Is Today's

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

  • TSU has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $39.8 million.
  • TSU has traded 3.9 million shares today.
  • TSU is down 4.3% today.
  • TSU was up 9.9% yesterday.

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More details on TSU:

TIM Participac es S.A., through its subsidiaries, provides mobile telecommunications services using digital technologies to business and individual customers in Brazil. The company offers mobile, fixed and long distance telephony, and data transmission and Internet services. The stock currently has a dividend yield of 3%. TSU has a PE ratio of 14.9. Currently there are 6 analysts that rate Tim Holding Company a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Tim Holding Company has been 976,600 shares per day over the past 30 days. Tim Holding has a market cap of $10.9 billion and is part of the technology sector and telecommunications industry. Shares are up 13.3% year to date as of the close of trading on Monday.

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 Tim Holding Company as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year, increase in net income and notable return on equity. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.34, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.29, which illustrates the ability to avoid short-term cash problems.
  • 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. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • TIM PARTICIPACOES SA reported flat earnings per share in the most recent quarter. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, TIM PARTICIPACOES SA reported lower earnings of $1.46 versus $2.02 in the prior year. This year, the market expects an improvement in earnings ($1.52 versus $1.46).
  • The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Wireless Telecommunication Services industry average. The net income increased by 2.2% when compared to the same quarter one year prior, going from $158.37 million to $161.86 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Wireless Telecommunication Services industry and the overall market, TIM PARTICIPACOES SA's return on equity is below that of both the industry average and 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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