Roof Leaker To Watch: Comcast (CMCSK)

Trade-Ideas LLC identified Comcast ( CMCSK) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Comcast as such a stock due to the following factors:

  • CMCSK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $115.6 million.
  • CMCSK has traded 316,772 shares today.
  • CMCSK is trading at 1.95 times the normal volume for the stock at this time of day.
  • CMCSK crossed below its 200-day simple moving average.

'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.

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More details on CMCSK:

Comcast Corporation operates as a media and technology company worldwide. It operates through Cable Communications, Cable Networks, Broadcast Television, Filmed Entertainment, and Theme Parks segments. The stock currently has a dividend yield of 1.6%. CMCSK has a PE ratio of 21. Currently there is 1 analyst that rates Comcast a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Comcast has been 3.6 million shares per day over the past 30 days. Comcast has a market cap of $21.1 billion and is part of the services sector and media industry. The stock has a beta of 0.99 and a short float of 9.9% with 14.75 days to cover. Shares are up 5% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Comcast as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • CMCSK's revenue growth has slightly outpaced the industry average of 7.3%. Since the same quarter one year prior, revenues rose by 11.2%. 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.
  • Net operating cash flow has slightly increased to $4,979.00 million or 4.71% when compared to the same quarter last year. Despite an increase in cash flow, COMCAST CORP's average is still marginally south of the industry average growth rate of 8.28%.
  • The debt-to-equity ratio is somewhat low, currently at 0.92, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.49 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • Compared to where it was trading a year ago, CMCSK's share price has not changed very much due to (a) the relatively weak year-over-year performance of the overall market, (b) the company's stagnant earnings, and (c) other mixed results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

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