Strong And Under The Radar: Madison Square Garden (MSG)

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 Madison Square Garden ( MSG) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Madison Square Garden as such a stock due to the following factors:

  • MSG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $60.8 million.
  • MSG is making at least a new 3-day high.
  • MSG has a PE ratio of 3.
  • MSG is mentioned 1.90 times per day on StockTwits.
  • MSG has not yet been mentioned on StockTwits today.
  • MSG is currently in the upper 20% of its 1-year range.
  • MSG is in the upper 35% of its 20-day range.
  • MSG is in the upper 45% of its 5-day range.
  • MSG is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on MSG:

The Madison Square Garden Company, together with its subsidiaries, is engaged in sports, entertainment, and media businesses in the United States. It operates through three segments: MSG Sports, MSG Media, and MSG Entertainment. MSG has a PE ratio of 3. Currently there are 6 analysts that rate Madison Square Garden a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Madison Square Garden has been 664,000 shares per day over the past 30 days. Madison Square Garden has a market cap of $5.3 billion and is part of the services sector and media industry. The stock has a beta of 0.51 and a short float of 8.4% with 7.47 days to cover. Shares are up 12.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Madison Square Garden as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, good cash flow from operations, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. 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:
  • 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 108.4% when compared to the same quarter one year prior, rising from $19.05 million to $39.71 million.
  • Net operating cash flow has significantly increased by 392.00% to $19.91 million when compared to the same quarter last year. In addition, MADISON SQUARE GARDEN CO has also vastly surpassed the industry average cash flow growth rate of 15.23%.
  • 39.61% is the gross profit margin for MADISON SQUARE GARDEN CO which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 8.83% trails the industry average.
  • MSG has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.71 is somewhat weak and could be cause for future problems.
  • 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 Media industry and the overall market on the basis of return on equity, MADISON SQUARE GARDEN CO has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

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