Trade-Ideas: Cablevision Systems (CVC) 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.

Trade-Ideas LLC identified Cablevision Systems ( CVC) 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 Cablevision Systems as such a stock due to the following factors:

  • CVC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $137.2 million.
  • CVC has traded 2.8 million shares today.
  • CVC traded in a range 258.6% of the normal price range with a price range of $1.38.
  • CVC traded above its daily resistance level (quality: 151 days, meaning that the stock is crossing a resistance level set by the last 151 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 CVC:

Cablevision Systems Corporation, together with its subsidiaries, owns and operates cable systems in the United States. The company operates through three segments: Cable, Lightpath, and Other. The stock currently has a dividend yield of 2.9%. CVC has a PE ratio of 20.4. Currently there are 3 analysts that rate Cablevision Systems a buy, 4 analysts rate it a sell, and 8 rate it a hold.

The average volume for Cablevision Systems has been 3.3 million shares per day over the past 30 days. Cablevision Systems has a market cap of $4.5 billion and is part of the services sector and media industry. The stock has a beta of 1.35 and a short float of 43.7% with 9.26 days to cover. Shares are down 1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Cablevision Systems as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 5.7%. Since the same quarter one year prior, revenues slightly increased by 2.5%. 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.
  • 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. 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 gross profit margin for CABLEVISION SYS CORP is rather high; currently it is at 50.71%. Regardless of CVC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CVC's net profit margin of 2.76% is significantly lower than the industry average.
  • CABLEVISION SYS CORP's earnings per share declined by 41.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, CABLEVISION SYS CORP increased its bottom line by earning $1.14 versus $0.48 in the prior year. For the next year, the market is expecting a contraction of 28.1% in earnings ($0.82 versus $1.14).
  • 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 50.3% when compared to the same quarter one year ago, falling from $89.76 million to $44.63 million.

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