Trade-Ideas: Scripps Networks Interactive (SNI) Is Today's

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 "barbarian at the gate" (strong stocks crossing above resistance 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 $64.6 million.
  • SNI has traded 554,795 shares today.
  • SNI traded in a range 200.5% of the normal price range with a price range of $2.43.
  • SNI traded above its daily resistance level (quality: 98 days, meaning that the stock is crossing a resistance level set by the last 98 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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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 21.6. Currently there are 6 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 1.1 million shares per day over the past 30 days. Scripps Networks Interactive has a market cap of $8.0 billion and is part of the services sector and media industry. The stock has a beta of 0.65 and a short float of 6.6% with 9.06 days to cover. Shares are down 9.8% year-to-date as of the close of trading on Monday.

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 Scripps Networks Interactive as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, good cash flow from operations and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.9%. Since the same quarter one year prior, revenues slightly increased by 4.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.82, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that SNI's debt-to-equity ratio is low, the quick ratio, which is currently 0.66, displays a potential problem in covering short-term cash needs.
  • SCRIPPS NETWORKS INTERACTIVE has improved earnings per share by 6.9% 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 ($3.92 versus $3.40).
  • Net operating cash flow has slightly increased to $264.32 million or 3.53% when compared to the same quarter last year. Despite an increase in cash flow, SCRIPPS NETWORKS INTERACTIVE's cash flow growth rate is still lower than the industry average growth rate of 16.28%.
  • The gross profit margin for SCRIPPS NETWORKS INTERACTIVE is rather high; currently it is at 67.86%. Regardless of SNI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SNI's net profit margin of 20.38% compares favorably to 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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