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.

Trade-Ideas LLC identified American Tower ( AMT) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified American Tower as such a stock due to the following factors:

  • AMT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $257.0 million.
  • AMT has traded 1.2 million shares today.
  • AMT is trading at 1.53 times the normal volume for the stock at this time of day.
  • AMT crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. 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 on. 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 AMT:

American Tower Corporation is a real estate investment trust. It invests in the real estate markets across the globe. The firm through its subsidiaries owns, operates and develops wireless and broadcast communications real estate. The stock currently has a dividend yield of 1.8%. AMT has a PE ratio of 48.1. Currently there are 11 analysts that rate American Tower a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for American Tower has been 2.9 million shares per day over the past 30 days. American Tower has a market cap of $38.1 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.36 and a short float of 1.6% with 2.38 days to cover. Shares are down 4.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates American Tower as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • AMT's revenue growth has slightly outpaced the industry average of 10.1%. Since the same quarter one year prior, revenues rose by 11.1%. 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 Real Estate Investment Trusts (REITs) industry and the overall market, AMERICAN TOWER CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • AMERICAN TOWER CORP reported significant earnings per share improvement 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, AMERICAN TOWER CORP increased its bottom line by earning $2.01 versus $1.38 in the prior year. This year, the market expects an improvement in earnings ($2.34 versus $2.01).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 80.4% when compared to the same quarter one year prior, rising from $99.98 million to $180.39 million.
  • Net operating cash flow has increased to $564.98 million or 24.28% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 13.05%.

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