Trade-Ideas: Cumulus Media (CMLS) Is Today's Pre-Market Mover With Heavy 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 Cumulus Media ( CMLS) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Cumulus Media as such a stock due to the following factors:

  • CMLS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.7 million.
  • CMLS traded 1.9 million shares today in the pre-market hours as of 9:05 AM, representing 130.2% of its average daily volume.

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More details on CMLS:

Cumulus Media Inc. owns and operates commercial radio station clusters in the United States. The company engages in the sale of local, regional, and national advertising for broadcast on its radio stations. As of March 18, 2013, it owned or operated 517 radio stations in 108 media markets. Currently there are 2 analysts that rate Cumulus Media a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Cumulus Media has been 817,800 shares per day over the past 30 days. Cumulus Media has a market cap of $849.0 million and is part of the services sector and media industry. The stock has a beta of 1.88 and a short float of 13.8% with 5.82 days to cover. Shares are up 95.9% year to date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Cumulus Media as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and generally higher debt management risk.

Highlights from the ratings report include:
  • CMLS's revenue growth has slightly outpaced the industry average of 0.7%. Since the same quarter one year prior, revenues slightly increased by 3.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 466.66% and other important driving factors, this stock has surged by 93.81% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • CUMULUS MEDIA 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, CUMULUS MEDIA INC swung to a loss, reporting -$0.67 versus $0.04 in the prior year. This year, the market expects an improvement in earnings ($0.22 versus -$0.67).
  • The debt-to-equity ratio is very high at 7.93 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 2.50, which shows the ability to cover short-term cash needs.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Media industry and the overall market, CUMULUS MEDIA INC's return on equity significantly trails 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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