Nexstar Broadcasting Group (NXST) Showing Signs Of Perilous Reversal 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 Nexstar Broadcasting Group ( NXST) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Nexstar Broadcasting Group as such a stock due to the following factors:

  • NXST has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $30.4 million.
  • NXST has traded 321,775 shares today.
  • NXST is down 3% today.
  • NXST was up 13.5% yesterday.

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More details on NXST:

Nexstar Broadcasting Group, Inc. operates as a television broadcasting and digital media company in the United States. It focuses on the acquisition, development, and operation of television stations and interactive community Websites in medium-sized markets. The stock currently has a dividend yield of 1.4%. NXST has a PE ratio of 286.7. Currently there are 3 analysts that rate Nexstar Broadcasting Group a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Nexstar Broadcasting Group has been 581,000 shares per day over the past 30 days. Nexstar Broadcasting Group has a market cap of $1.3 billion and is part of the services sector and media industry. The stock has a beta of 2.23 and a short float of 18.4% with 6.94 days to cover. Shares are down 12.4% 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 Nexstar Broadcasting Group as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and good cash flow from operations. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.

Highlights from the ratings report include:
  • NXST's revenue growth has slightly outpaced the industry average of 14.6%. Since the same quarter one year prior, revenues rose by 19.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 943.0% when compared to the same quarter one year prior, rising from $0.71 million to $7.35 million.
  • The gross profit margin for NEXSTAR BROADCASTING GROUP is rather high; currently it is at 62.28%. 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 5.49% trails the industry average.
  • NEXSTAR BROADCASTING GROUP 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, NEXSTAR BROADCASTING GROUP swung to a loss, reporting -$0.08 versus $5.69 in the prior year. This year, the market expects an improvement in earnings ($2.51 versus -$0.08).
  • Powered by its strong earnings growth of 1050.00% and other important driving factors, this stock has surged by 30.97% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.

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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