Trade-Ideas: CenturyLink (CTL) 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 CenturyLink ( CTL) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified CenturyLink as such a stock due to the following factors:

  • CTL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $130.7 million.
  • CTL has traded 3.4 million shares today.
  • CTL traded in a range 226.5% of the normal price range with a price range of $0.94.
  • CTL traded above its daily resistance level (quality: 14 days, meaning that the stock is crossing a resistance level set by the last 14 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock s movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on CTL:

CenturyLink, Inc. operates as an integrated telecommunications company in the United States. The stock currently has a dividend yield of 6.7%. CTL has a PE ratio of 16.1. Currently there are 9 analysts that rate CenturyLink a buy, 3 analysts rate it a sell, and 5 rate it a hold.

The average volume for CenturyLink has been 5.0 million shares per day over the past 30 days. CenturyLink has a market cap of $19.3 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 0.56 and a short float of 6.8% with 9.01 days to cover. Shares are down 17.8% year to date as of the close of trading on Friday.

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 CenturyLink as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, reasonable valuation levels, good cash flow from operations, impressive record of earnings per share growth and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

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 Diversified Telecommunication Services industry. The net income increased by 263.5% when compared to the same quarter one year prior, rising from $74.00 million to $269.00 million.
  • Net operating cash flow has increased to $1,469.00 million or 20.80% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -2.07%.
  • CENTURYLINK INC reported significant earnings per share improvement 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, CENTURYLINK INC reported lower earnings of $1.24 versus $1.29 in the prior year. This year, the market expects an improvement in earnings ($2.71 versus $1.24).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 2.8%. Since the same quarter one year prior, revenues slightly dropped by 1.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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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