With shares of Comcast (NASDAQ:CMCSA) trading around $43, is CMCSA an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
T = Trends for a Stock’s Movement
Comcast is is a provider of entertainment, information, and communications products and services. The company operates in five segments: Cable Communications, Cable Networks, Broadcast Television, Filmed Entertainment, and Theme Parks. Comcast offers television, video, high-speed Internet, and voice services to residential and business customers. It also operates NBC and Telemundo broadcast networks; provides filmed entertainment under the Universal Pictures, Focus Features, and Illumination names; and operates theme parks, studios, and a dining, retail, and entertainment complex. The company reaches a large audience through all of its mediums. As a multimedia giant, look for Comcast to provide the products and services that consumers and companies enjoy.
T = Technicals on the Stock Chart are Strong
Comcast stock has seen a consistent uptrend after breaking out just last year. The stock has been exploding higher and is now trading at all-time high prices. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Comcast is trading above its rising key averages which signal neutral to bullish price action in the near-term.
(Source: Thinkorswim)
Taking a look at the implied volatility (red) and implied volatility skew levels of Comcast options may help determine if investors are bullish, neutral, or bearish.
| Implied Volatility (IV) | 30-Day IV Percentile | 90-Day IV Percentile | |
| Comcast Options | 18.8% | 10% | 9% |
What does this mean? This means that investors or traders are buying a very low amount of call and put options contracts, as compared to the last 30 and 90 trading days.
| Put IV Skew | Call IV Skew | |
| June Options | Flat | Average |
| July Options | Flat | Average |
As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a very low amount of call and put option contracts and are leaning neutral to bullish over the next two months.
On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.
E = Earnings Are Increasing Quarter-Over-Quarter
Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Comcast’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Comcast look like, and more importantly, how did the markets like these numbers?
Best Low Price Companies To Own For 20142013 Q1 | 2012 Q4 | 2012 Q3 | 2012 Q2 | |
| Earnings Growth (Y-O-Y) | 20% | 20.09% | 136.4% | 35.14% |
| Revenue Growth (Y-O-Y) | 2.9% | 5.95% | 15.38% | 6.13% |
| Earnings Reaction | 1.35% | 0.85% | 3.3% | 3.07% |
Comcast has seen increasing earnings and revenue figures over the last four quarters. From these figures, the markets have been pleased with Comcast’s recent earnings announcements.
P = Excellent Relative Performance Versus Peers and Sector
How has Comcast stock done relative to its peers, DirecTV (NASDAQ:DTV), Dish Network (NASDAQ:DISH), Time Warner Cable (NYSE:TWC), and sector?
| Comcast | DirecTV | Dish Network | Time Warner Cable | Sector | |
| Year-to-Date Return | 16.11% | 28.97% | 7.14% | 1.89% | 12.58% |
Comcast has been a relative performance leader, year-to-date.
Conclusion
Comcast provides valuable multimedia and entertainment products and services to a growing audience. The stock has recently broken out, exploded to all-time high prices, and sees no signs of slowing. Earnings and revenue numbers have been rising, over the last four quarters, which has really excited investors. Relative to its peers and sector, Comcast has been one of the year-to-date performance leaders. Look for Comcast to continue to OUTPERFORM.
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