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 AMC Networks ( AMCX) 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 AMC Networks as such a stock due to the following factors:
- AMCX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $47.5 million.
- AMCX has traded 262,431 shares today.
- AMCX traded in a range 229.5% of the normal price range with a price range of $3.72.
- AMCX traded above its daily resistance level (quality: 112 days, meaning that the stock is crossing a resistance level set by the last 112 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. EXCLUSIVE OFFER: Get the inside scoop on opportunities in AMCX with the Ticky from Trade-Ideas. See the FREE profile for AMCX NOW at Trade-Ideas More details on AMCX: AMC Networks Inc. owns and operates cable television's brands delivering content to audiences, and a platform to distributors and advertisers in the United States and internationally. The company operates in two segments, National Networks, and International and Other. AMCX has a PE ratio of 18.9. Currently there are 6 analysts that rate AMC Networks a buy, no analysts rate it a sell, and 6 rate it a hold. The average volume for AMC Networks has been 722,800 shares per day over the past 30 days. AMC has a market cap of $4.3 billion and is part of the services sector and media industry. The stock has a beta of 1.04 and a short float of 2.5% with 2.21 days to cover. Shares are up 2.2% 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 AMC Networks as a sell. The area that we feel has been the company's primary weakness has been its poor profit margins. Highlights from the ratings report include:
- The gross profit margin for AMC NETWORKS INC is rather high; currently it is at 60.27%. Regardless of AMCX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AMCX's net profit margin of 14.69% compares favorably to the industry average.
- 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. Regardless of the rise in share value over the previous year, we feel that the risks involved in investing in this stock do not compensate for any future upside potential.
- AMC NETWORKS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, AMC NETWORKS INC increased its bottom line by earning $1.89 versus $1.33 in the prior year. This year, the market expects an improvement in earnings ($3.19 versus $1.89).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 58.6% when compared to the same quarter one year prior, rising from $36.65 million to $58.11 million.
- Net operating cash flow has increased to $66.46 million or 13.24% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -11.39%.
- You can view the full AMC Networks Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.