Today's Perilous Reversal Stock: Liberty Global (LBTYA)

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 Liberty Global ( LBTYA) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Liberty Global as such a stock due to the following factors:

  • LBTYA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $187.5 million.
  • LBTYA has traded 1.3 million shares today.
  • LBTYA is down 3% today.
  • LBTYA was up 7.4% yesterday.

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More details on LBTYA:

Liberty Global plc, together with its subsidiaries, provides video, broadband Internet, fixed-line telephony, and mobile services in Europe, Chile, Puerto Rico, and internationally. Currently there are 6 analysts that rate Liberty Global a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Liberty Global has been 3.4 million shares per day over the past 30 days. Liberty Global has a market cap of $10.4 billion and is part of the services sector and media industry. The stock has a beta of 1.69 and a short float of 8.7% with 5.48 days to cover. Shares are up 8.7% 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 Liberty Global as a hold. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • 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 118.9% when compared to the same quarter one year prior, rising from -$830.10 million to $157.10 million.
  • Net operating cash flow has slightly increased to $1,153.40 million or 3.00% when compared to the same quarter last year. Despite an increase in cash flow, LIBERTY GLOBAL PLC's cash flow growth rate is still lower than the industry average growth rate of 16.28%.
  • 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, LIBERTY GLOBAL PLC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Although LBTYA's debt-to-equity ratio of 3.76 is very high, it is currently less than that of the industry average. Along with this, the company manages to maintain a quick ratio of 0.27, which clearly demonstrates the inability to cover short-term cash needs.

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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