Heavy Early Morning Activity On Time Warner Cable (TWC)

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 Time Warner Cable ( TWC) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Time Warner Cable as such a stock due to the following factors:

  • TWC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $768.8 million.
  • TWC traded 500,285 shares today in the pre-market hours as of 8:01 AM, representing 12% of its average daily volume.

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More details on TWC:

Time Warner Cable Inc., together with its subsidiaries, provides video, high-speed data, and voice services in the United States. It operates in three segments: Residential Services, Business Services, and Other Operations. The stock currently has a dividend yield of 1.8%. TWC has a PE ratio of 24. Currently there are 10 analysts that rate Time Warner Cable a buy, 1 analyst rates it a sell, and 9 rate it a hold.

The average volume for Time Warner Cable has been 3.4 million shares per day over the past 30 days. Time Warner Cable has a market cap of $47.1 billion and is part of the services sector and media industry. The stock has a beta of 1.00 and a short float of 2.7% with 1.91 days to cover. Shares are up 8.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Time Warner Cable as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, solid stock price performance and notable return on equity. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 3.8%. Since the same quarter one year prior, revenues slightly increased by 3.5%. 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.
  • TIME WARNER CABLE INC's earnings per share declined by 6.5% 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, TIME WARNER CABLE INC increased its bottom line by earning $7.17 versus $6.71 in the prior year. This year, the market expects an improvement in earnings ($7.25 versus $7.17).
  • Net operating cash flow has slightly increased to $1,508.00 million or 7.94% when compared to the same quarter last year. Despite an increase in cash flow, TIME WARNER CABLE INC's average is still marginally south of the industry average growth rate of 15.28%.
  • 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. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Media industry and the overall market, TIME WARNER CABLE INC's return on equity significantly exceeds that of both the industry average and the S&P 500.

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