Windstream Holdings (WIN) Stock Storming The Castle Today

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 Windstream Holdings ( WIN) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Windstream Holdings as such a stock due to the following factors:

  • WIN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $75.3 million.
  • WIN has traded 11.6 million shares today.
  • WIN is trading at 1.63 times the normal volume for the stock at this time of day.
  • WIN crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. 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 on. 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 WIN:

Windstream Holdings, Inc. provides communications and technology solutions in the United States. The company offers managed services and cloud computing services to businesses, as well as broadband, voice, and video services to consumers primarily in rural markets. The stock currently has a dividend yield of 12.5%. WIN has a PE ratio of 20.6. Currently there is 1 analyst that rates Windstream Holdings a buy, 4 analysts rate it a sell, and 7 rate it a hold.

The average volume for Windstream Holdings has been 7.3 million shares per day over the past 30 days. Windstream has a market cap of $4.8 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 0.92 and a short float of 15.8% with 9.93 days to cover. Shares are down 0.5% 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 Windstream Holdings as a hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and weak operating cash flow.

Highlights from the ratings report include:
  • WINDSTREAM HOLDINGS 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 two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, WINDSTREAM HOLDINGS INC increased its bottom line by earning $0.39 versus $0.29 in the prior year. This year, the market expects an improvement in earnings ($0.41 versus $0.39).
  • 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 1084.0% when compared to the same quarter one year prior, rising from $10.00 million to $118.40 million.
  • The gross profit margin for WINDSTREAM HOLDINGS INC is rather high; currently it is at 59.42%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.93% trails the industry average.
  • Net operating cash flow has decreased to $358.70 million or 32.82% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • WIN has underperformed the S&P 500 Index, declining 6.76% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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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