Trade-Ideas: AirMedia Group (AMCN) 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 AirMedia Group ( AMCN) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified AirMedia Group as such a stock due to the following factors:

  • AMCN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.3 million.
  • AMCN has traded 2.2 million shares today.
  • AMCN is up 44.6% today.
  • AMCN was down 24% yesterday.

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More details on AMCN:

AirMedia Group Inc. operates out-of-home advertising platforms primarily in the People's Republic of China. Currently there is 1 analyst that rates AirMedia Group a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for AirMedia Group has been 1.8 million shares per day over the past 30 days. AirMedia Group has a market cap of $342.4 million and is part of the services sector and media industry. Shares are up 123% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates AirMedia Group as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, AMCN's share price has jumped by 210.66%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • AMCN 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. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.32, which illustrates the ability to avoid short-term cash problems.
  • AMCN, with its decline in revenue, slightly underperformed the industry average of 3.8%. Since the same quarter one year prior, revenues slightly dropped by 4.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • AIRMEDIA GROUP INC -ADS has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, AIRMEDIA GROUP INC -ADS reported poor results of -$0.44 versus -$0.18 in the prior year. For the next year, the market is expecting a contraction of 14.5% in earnings (-$0.50 versus -$0.44).
  • 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 62.0% when compared to the same quarter one year ago, falling from -$3.51 million to -$5.68 million.

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