Entravision Communications (EVC) Is Today's Strong On High Volume Stock

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 Entravision Communications ( EVC) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Entravision Communications as such a stock due to the following factors:

  • EVC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.1 million.
  • EVC has traded 91,940 shares today.
  • EVC is trading at 8.00 times the normal volume for the stock at this time of day.
  • EVC is trading at a new high 3.03% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on EVC:

Entravision Communications Corporation, operates as a diversified media company that utilizes a combination of television, radio, and digital media properties to reach Hispanic consumers in the United States and the border markets of Mexico. The stock currently has a dividend yield of 1.3%. EVC has a PE ratio of 24. Currently there is 1 analyst that rates Entravision Communications a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Entravision Communications has been 273,800 shares per day over the past 30 days. Entravision has a market cap of $494.7 million and is part of the services sector and media industry. The stock has a beta of 1.76 and a short float of 3.3% with 2.64 days to cover. Shares are up 27.3% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Entravision Communications as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and increase in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • EVC's revenue growth has slightly outpaced the industry average of 3.9%. Since the same quarter one year prior, revenues rose by 13.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 41.37% over the past year, a rise that has exceeded that of the S&P 500 Index. 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.
  • The gross profit margin for ENTRAVISION COMMUNICATIONS is rather high; currently it is at 52.91%. 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 8.87% trails the industry average.
  • ENTRAVISION COMMUNICATIONS has improved earnings per share by 20.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ENTRAVISION COMMUNICATIONS reported lower earnings of $0.31 versus $1.48 in the prior year. For the next year, the market is expecting a contraction of 16.1% in earnings ($0.26 versus $0.31).
  • Although EVC's debt-to-equity ratio of 2.27 is very high, it is currently less than that of the industry average. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 3.16, which shows the ability to cover short-term cash needs.

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