Why Windstream Holdings (WIN) Stock Is Surging Today

NEW YORK (TheStreet) -- Shares of Windstream Holdings Inc. (WIN) are climbing higher by 15.32% to $12.14 on heavy trading volume on Tuesday morning, after the company announced that it's spinning off assets into a publicly traded REIT.

Windstream, a company that provides advanced network communications, announced today that it will be spinning off its telecommunications network assets into an independent real estate investment trust.

"The transaction will enable Windstream to accelerate network investments, provide enhanced services to customers, and maximize shareholder value," the company said.

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Separately, TheStreet Ratings team rates WINDSTREAM HOLDINGS INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate WINDSTREAM HOLDINGS INC (WIN) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, solid stock price performance, notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Net operating cash flow has slightly increased to $319.80 million or 4.99% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -14.28%.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to other companies in the Diversified Telecommunication Services industry and the overall market on the basis of return on equity, WINDSTREAM HOLDINGS INC has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
  • Compared to its closing price of one year ago, WIN's share price has jumped by 28.17%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • The gross profit margin for WINDSTREAM HOLDINGS INC is rather high; currently it is at 52.84%. Regardless of WIN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.09% trails the industry average.
  • WIN, with its decline in revenue, slightly underperformed the industry average of 3.5%. Since the same quarter one year prior, revenues slightly dropped by 2.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • You can view the full analysis from the report here: WIN Ratings Report
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