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 World Wrestling Entertainment Inc. Class A ( WWE) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified World Wrestling Entertainment Inc. Class A as such a stock due to the following factors:
- WWE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $35.0 million.
- WWE has traded 2.9 million shares today.
- WWE traded in a range 271.8% of the normal price range with a price range of $3.70.
- WWE traded below its daily resistance level (quality: 34 days, meaning that the stock is crossing a resistance level set by the last 34 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower. EXCLUSIVE OFFER: Get the inside scoop on opportunities in WWE with the Ticky from Trade-Ideas. See the FREE profile for WWE NOW at Trade-Ideas More details on WWE: World Wrestling Entertainment, Inc., an integrated media and entertainment company, is engaged in the sports entertainment business worldwide. It operates in four segments: Live and Televised Entertainment, Consumer Products, Digital Media, and WWE Studios. The stock currently has a dividend yield of 1.6%. WWE has a PE ratio of 772.5. Currently there is 1 analyst that rates World Wrestling Entertainment Inc. Class A a buy, no analysts rate it a sell, and 3 rate it a hold. The average volume for World Wrestling Entertainment Inc. Class A has been 1.3 million shares per day over the past 30 days. World Wrestling Entertainment Inc. Class A has a market cap of $907.0 million and is part of the services sector and media industry. The stock has a beta of 0.57 and a short float of 16.4% with 3.26 days to cover. Shares are up 69% 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 World Wrestling Entertainment Inc. Class A as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity. Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 4.0%. Since the same quarter one year prior, revenues slightly increased by 2.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- WWE's debt-to-equity ratio is very low at 0.11 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, WWE has a quick ratio of 2.05, which demonstrates the ability of the company to cover short-term liquidity needs.
- Compared to its closing price of one year ago, WWE's share price has jumped by 221.01%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- The gross profit margin for WORLD WRESTLING ENTMT INC is currently lower than what is desirable, coming in at 30.81%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -6.66% is significantly below that of the industry average.
- Net operating cash flow has decreased to $11.60 million or 47.45% 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.
- You can view the full World Wrestling Entertainment Inc. Class A 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.