Trade-Ideas: Directv (DTV) 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 Directv ( DTV) 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 Directv as such a stock due to the following factors:

  • DTV has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $233.8 million.
  • DTV has traded 3.2 million shares today.
  • DTV traded in a range 201.3% of the normal price range with a price range of $2.39.
  • DTV traded above its daily resistance level (quality: 10 days, meaning that the stock is crossing a resistance level set by the last 10 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.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in DTV with the Ticky from Trade-Ideas. See the FREE profile for DTV NOW at Trade-Ideas

More details on DTV:

DIRECTV, a digital television entertainment company, engages in the direct-to-home (DTH) business in the United States and Latin America. It acquires, promotes, sells, and distributes digital entertainment programming primarily through satellite to residential and commercial subscribers. DTV has a PE ratio of 17. Currently there is 1 analyst that rates Directv a buy, no analysts rate it a sell, and 14 rate it a hold.

The average volume for Directv has been 2.3 million shares per day over the past 30 days. Directv has a market cap of $45.1 billion and is part of the services sector and media industry. The stock has a beta of 1.25 and a short float of 2.2% with 4.62 days to cover. Shares are up 3.1% year-to-date as of the close of trading on Monday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Directv as a hold. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income and revenue growth. However, as a counter to these strengths, we find that the stock has experienced relatively poor performance when compared with the S&P 500 during the past year.

Highlights from the ratings report include:
  • DIRECTV has improved earnings per share by 32.1% 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. This trend suggests that the performance of the business is improving. During the past fiscal year, DIRECTV increased its bottom line by earning $5.42 versus $5.19 in the prior year. This year, the market expects an improvement in earnings ($5.99 versus $5.42).
  • 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 30.1% when compared to the same quarter one year prior, rising from $561.00 million to $730.00 million.
  • Net operating cash flow has slightly increased to $1,636.00 million or 2.89% when compared to the same quarter last year. Despite an increase in cash flow, DIRECTV's cash flow growth rate is still lower than the industry average growth rate of 15.04%.
  • 47.51% is the gross profit margin for DIRECTV which we consider to be strong. Regardless of DTV's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 8.96% trails the industry average.
  • In its most recent trading session, DTV has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

More from Markets

AMD Rises Above the Competition; Loan Losses Mount for Big Banks -- ICYMI

AMD Rises Above the Competition; Loan Losses Mount for Big Banks -- ICYMI

McKesson Internal Review Clears Senior Management of Wrongdoing on Opioids

McKesson Internal Review Clears Senior Management of Wrongdoing on Opioids

Starbucks Surprises Wall Street With U.S. Sales Up a Paltry 2%

Starbucks Surprises Wall Street With U.S. Sales Up a Paltry 2%

Dow Jumps 238 Points as S&P 500, Nasdaq Also Climb

Dow Jumps 238 Points as S&P 500, Nasdaq Also Climb

Why Nashville, Denver, LA Should Reconsider Bids for Amazon HQ2

Why Nashville, Denver, LA Should Reconsider Bids for Amazon HQ2