3 Stocks Improving Performance Of The Media Industry

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.

All three major indices traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 30 points (0.2%) at 17,107 as of Tuesday, Aug. 26, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 2,006 issues advancing vs. 1,020 declining with 179 unchanged.

The Media industry as a whole closed the day down 0.1% versus the S&P 500, which was up 0.1%. Top gainers within the Media industry included Radio One ( ROIA), up 3.0%, Discovery Communications ( DISCB), up 3.6%, Insignia Systems ( ISIG), up 2.3%, Emmis Communications ( EMMS), up 2.8% and Radio One ( ROIAK), up 2.1%.

TheStreet Ratings Group would like to highlight 3 stocks pushing the industry higher today:

Emmis Communications ( EMMS) is one of the companies that pushed the Media industry higher today. Emmis Communications was up $0.07 (2.8%) to $2.57 on light volume. Throughout the day, 29,659 shares of Emmis Communications exchanged hands as compared to its average daily volume of 140,100 shares. The stock ranged in a price between $2.50-$2.57 after having opened the day at $2.50 as compared to the previous trading day's close of $2.50.

Emmis Communications Corporation, a diversified media company, is engaged in radio broadcasting activities in the United States. It operates in two segments, Radio and Publishing. Emmis Communications has a market cap of $96.8 million and is part of the services sector. Shares are down 6.7% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Emmis Communications a buy, no analysts rate it a sell, and none rate it a hold.

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TheStreet Ratings rates Emmis Communications as a hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, revenue growth and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and weak operating cash flow.

Highlights from TheStreet Ratings analysis on EMMS go as follows:

  • Compared to other companies in the Media industry and the overall market, EMMIS COMMUNICATIONS CP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • EMMS's revenue growth has slightly outpaced the industry average of 11.9%. Since the same quarter one year prior, revenues rose by 18.1%. 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.
  • EMMIS COMMUNICATIONS CP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, EMMIS COMMUNICATIONS CP turned its bottom line around by earning $0.93 versus -$0.21 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Media industry. The net income has significantly decreased by 72.5% when compared to the same quarter one year ago, falling from $3.48 million to $0.96 million.
  • Although EMMS's debt-to-equity ratio of 3.31 is very high, it is currently less than that of the industry average. Along with the unfavorable debt-to-equity ratio, EMMS maintains a poor quick ratio of 0.92, which illustrates the inability to avoid short-term cash problems.

You can view the full analysis from the report here: Emmis Communications 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.

At the close, Discovery Communications ( DISCB) was up $1.60 (3.6%) to $46.41 on light volume. Throughout the day, 400 shares of Discovery Communications exchanged hands as compared to its average daily volume of 900 shares. The stock ranged in a price between $44.26-$46.41 after having opened the day at $44.26 as compared to the previous trading day's close of $44.82.

Discovery Communications, Inc. operates as a media company worldwide. The company operates in three segments: U.S. Networks, International Networks, and Education. Discovery Communications has a market cap of $301.7 million and is part of the services sector. Shares are down 48.6% year-to-date as of the close of trading on Monday. Currently there is 1 analyst who rates Discovery Communications a buy, no analysts rate it a sell, and none rate it a hold.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreet Ratings rates Discovery Communications as a buy. 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, revenue growth, notable return on equity and attractive valuation levels. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from TheStreet Ratings analysis on DISCB go as follows:

  • DISCOVERY COMMUNICATIONS INC has improved earnings per share by 32.9% 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. During the past fiscal year, DISCOVERY COMMUNICATIONS INC increased its bottom line by earning $2.97 versus $2.52 in the prior year. This year, the market expects an improvement in earnings ($7.31 versus $2.97).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Media industry average. The net income increased by 26.3% when compared to the same quarter one year prior, rising from $300.00 million to $379.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 11.9%. Since the same quarter one year prior, revenues slightly increased by 9.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Media industry and the overall market, DISCOVERY COMMUNICATIONS INC's return on equity exceeds that of both the industry average and the S&P 500.

You can view the full analysis from the report here: Discovery Communications 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.

Radio One ( ROIA) was another company that pushed the Media industry higher today. Radio One was up $0.09 (3.0%) to $3.02 on average volume. Throughout the day, 2,205 shares of Radio One exchanged hands as compared to its average daily volume of 2,800 shares. The stock ranged in a price between $2.90-$3.02 after having opened the day at $2.90 as compared to the previous trading day's close of $2.93.

Radio One, Inc., together with its subsidiaries, operates as an urban-oriented multi-media company in the United States. The company operates through four segments: Radio Broadcasting, Reach Media, Internet, and Cable Television. Radio One has a market cap of $6.8 million and is part of the services sector. Shares are down 22.9% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Radio One a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Radio One as a sell. Among the areas we feel are negative, one of the most important has been very high debt management risk by most measures.

Highlights from TheStreet Ratings analysis on ROIA go as follows:

  • Although ROIA's debt-to-equity ratio of 3.28 is very high, it is currently less than that of the industry average.
  • 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. Compared to other companies in the Media industry and the overall market, RADIO ONE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for RADIO ONE INC is rather high; currently it is at 68.71%. Regardless of ROIA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ROIA's net profit margin of -9.97% significantly underperformed when compared to the industry average.
  • ROIA, with its decline in revenue, underperformed when compared the industry average of 11.9%. Since the same quarter one year prior, revenues slightly dropped by 9.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • RADIO ONE INC has improved earnings per share by 20.7% 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 year. During the past fiscal year, RADIO ONE INC continued to lose money by earning -$1.30 versus -$1.33 in the prior year.

You can view the full analysis from the report here: Radio One 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.

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.

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