Barbarian At The Gate: Crown Castle International (CCI)

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 Crown Castle International ( CCI) 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 Crown Castle International as such a stock due to the following factors:

  • CCI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $177.2 million.
  • CCI has traded 495,423 shares today.
  • CCI traded in a range 207.9% of the normal price range with a price range of $2.04.
  • CCI traded above its daily resistance level (quality: 15 days, meaning that the stock is crossing a resistance level set by the last 15 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 CCI:

Crown Castle International Corp., together with its subsidiaries, owns, operates, and leases shared wireless infrastructure in the United States and Australia. The stock currently has a dividend yield of 4%. CCI has a PE ratio of 74. Currently there are 7 analysts that rate Crown Castle International a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Crown Castle International has been 2.1 million shares per day over the past 30 days. Crown Castle International has a market cap of $27.5 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 0.15 and a short float of 2.3% with 3.38 days to cover. Shares are up 4.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Crown Castle International as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, good cash flow from operations and increase in stock price during the past year. 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:
  • CROWN CASTLE INTL CORP has improved earnings per share by 25.9% 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, CROWN CASTLE INTL CORP increased its bottom line by earning $1.04 versus $0.28 in the prior year. This year, the market expects an improvement in earnings ($1.26 versus $1.04).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Real Estate Investment Trusts (REITs) industry average. The net income increased by 21.0% when compared to the same quarter one year prior, going from $101.50 million to $122.79 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.5%. Since the same quarter one year prior, revenues slightly increased by 7.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has increased to $460.79 million or 27.19% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 0.73%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.

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