Time Warner Cable (TWC) Highlighted As Weak On High Volume

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 Time Warner Cable ( TWC) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Time Warner Cable as such a stock due to the following factors:

  • TWC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $370.2 million.
  • TWC has traded 546,925 shares today.
  • TWC is trading at 8.30 times the normal volume for the stock at this time of day.
  • TWC is trading at a new low 5.07% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on TWC:

Time Warner Cable Inc., together with its subsidiaries, offers video, high-speed data, and voice services in the United States. The stock currently has a dividend yield of 2%. TWC has a PE ratio of 20.6. Currently there are 6 analysts that rate Time Warner Cable a buy, no analysts rate it a sell, and 10 rate it a hold.

The average volume for Time Warner Cable has been 2.1 million shares per day over the past 30 days. Time Warner Cable has a market cap of $41.1 billion and is part of the services sector and media industry. The stock has a beta of 0.92 and a short float of 1.7% with 1.74 days to cover. Shares are up 6% 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 Time Warner Cable as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, solid stock price performance 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 ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.4%. Since the same quarter one year prior, revenues slightly increased by 3.5%. 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.
  • Net operating cash flow has increased to $1,448.00 million or 19.76% when compared to the same quarter last year. In addition, TIME WARNER CABLE INC has also modestly surpassed the industry average cash flow growth rate of 19.11%.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. 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.
  • 35.95% is the gross profit margin for TIME WARNER CABLE INC which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 8.73% trails the industry average.

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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