Today's Water-Logged And Getting Wetter Stock: Scripps Networks Interactive (SNI)

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 Scripps Networks Interactive ( SNI) 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 Scripps Networks Interactive as such a stock due to the following factors:

  • SNI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $54.6 million.
  • SNI has traded 114,043 shares today.
  • SNI traded in a range 223.7% of the normal price range with a price range of $2.47.
  • SNI traded below its daily resistance level (quality: 50 days, meaning that the stock is crossing a resistance level set by the last 50 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.

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More details on SNI:

Scripps Networks Interactive, Inc. develops lifestyle-oriented content for television and the Internet markets in the United States and internationally. It delivers content that focuses on specifically defined topics of interest for audiences and advertisers. The stock currently has a dividend yield of 1%. SNI has a PE ratio of 23.5. Currently there are 5 analysts that rate Scripps Networks Interactive a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for Scripps Networks Interactive has been 663,500 shares per day over the past 30 days. Scripps Networks Interactive has a market cap of $9.1 billion and is part of the services sector and media industry. The stock has a beta of 1.11 and a short float of 2.3% with 2.89 days to cover. Shares are down 5% 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. Analysis:

TheStreet Quant Ratings rates Scripps Networks Interactive as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, solid stock price performance, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Media industry average. The net income increased by 19.0% when compared to the same quarter one year prior, going from $107.82 million to $128.30 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.9%. Since the same quarter one year prior, revenues slightly increased by 8.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • SCRIPPS NETWORKS INTERACTIVE has improved earnings per share by 20.8% 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, SCRIPPS NETWORKS INTERACTIVE reported lower earnings of $3.40 versus $4.46 in the prior year. This year, the market expects an improvement in earnings ($3.99 versus $3.40).
  • The debt-to-equity ratio is somewhat low, currently at 0.70, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.94 is somewhat weak and could be cause for future problems.


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