Trade-Ideas LLC identified Time Warner Cable ( TWC) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Time Warner Cable as such a stock due to the following factors:

  • TWC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $360.7 million.
  • TWC has traded 486,530 shares today.
  • TWC is trading at 2.11 times the normal volume for the stock at this time of day.
  • TWC crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. 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 on. 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 TWC:

Time Warner Cable Inc., together with its subsidiaries, provides video, high-speed data, and voice services in the United States. It operates in three segments: Residential Services, Business Services, and Other Operations. The stock currently has a dividend yield of 1.7%. TWC has a PE ratio of 26. Currently there are 6 analysts that rate Time Warner Cable a buy, 1 analyst rates it a sell, and 10 rate it a hold.

The average volume for Time Warner Cable has been 1.4 million shares per day over the past 30 days. Time Warner Cable has a market cap of $49.7 billion and is part of the services sector and media industry. The stock has a beta of 0.84 and a short float of 2.6% with 3.62 days to cover. Shares are down 3.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Time Warner Cable as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, good cash flow from operations and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 3.6%. 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.
  • Compared to its closing price of one year ago, TWC's share price has jumped by 25.08%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp 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 other strengths this company displays justify these higher price levels.
  • Net operating cash flow has slightly increased to $1,500.00 million or 3.59% when compared to the same quarter last year. Despite an increase in cash flow, TIME WARNER CABLE INC's average is still marginally south of the industry average growth rate of 9.41%.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Media industry and the overall market, TIME WARNER CABLE INC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • TIME WARNER CABLE INC's earnings per share declined by 13.1% 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, TIME WARNER CABLE INC increased its bottom line by earning $7.17 versus $6.71 in the prior year. For the next year, the market is expecting a contraction of 7.9% in earnings ($6.60 versus $7.17).

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