|
01.05.2010
TimelessWealth.net: technical trading idea with RHI
Entertainment, Inc. (NASDAQ: RHIE).
It is said
that in the equity market “timing is everything”. Staff at
TimelessWealth.net recognize the importance of notifying our
members of potential investment and trading opportunities in a
timely manner. This evening we’d like to introduce movie producer
and distributor, RHI Entertainment, Inc., traded on the NASDAQ
exchange under the symbol RHIE ($0.30).
RHI
Entertainment (NASDAQ: RHIE) frequented our market scan in several
desirable technical & fundamental criteria. Our market scan is
designed to fetch oversold and undervalued markets that have been
overlooked by the investing community. In other words, we seek
markets that are positioned to move in big ways, and put profits
in investors’ pockets.
Below we’ve
annotated RHI Entertainment’s chart in an effort to communicate
our technical findings and analysis on this oversold security.
Remember to read each comment attentively.
RHI
Entertainment (NASDAQ: RHIE)
develops,
produces, and distributes new made-for-television movies,
mini-series, and other television programming worldwide. The
company owns a library of existing long-form television content,
including domestic made-for-television, movies, and mini-series,
which it licenses primarily to broadcast and cable networks. It
holds rights to approximately 1,000 titles comprising
approximately 3,500 broadcast hours of long-form television
programming.
RHI
Entertainment (RHIE) is among the smallest capitalized movie
producers and distributors in its industry. In analytic terms, RHI
Entertainment boasts a miniscule 0.03 price to sales ratio (P/S),
as the company recorded revenue of over $142M in the most recent
year. The price to sales ratio is a measure of value, where,
companies with small P/S ratios are traditionally considered
undervalued.
How do we use
something as simple as market capitalization (market cap) to
project an adjustment to the industry average?
By taking the industry average market cap, $45M, and dividing that
figure by RHI Entertainment’s market cap, $4M. The result
yields 11.25 – but what does that mean? It means that if RHI
Entertainment’s market cap adjusted to reflect value similar to
that of its competitors, the change in price per share could
represent a potential 1125% return-on-investment (ROI) for
investors.
To be
capitalized at the industry average, a company should produce
financial results similar to the industry average. Undervalued in
terms of market cap, RHI Entertainment (RHIE) has outperformed the
Movie Production & Theaters Industry by recording nearly 20% more
in revenue in the most recent year. To add to that, shares of RHI
Entertainment (RHIE) trade at a 94% discount to their book value!
At $5.26 per share, an adjustment in price to the book value could
represent another favorable ROI, in the amount of 1653%.
In
recent news, RHI Entertainment notified shareholders that the
company had received a delisting notice from the NASDAQ exchange.
In order to comply with listing standards, RHI Entertainment will
need to trade above $1.00/share for at least 10 consecutive
trading sessions, anywhere in the next few months. Often companies
with this dilemma put forth fantastic efforts in order to regain
compliance with listing standards. Investors have been known to
take advantage of this situation in anticipation of a recovery and
rally in price. RHI Entertainment may potentially be positioned
for a similar turn of events coming off of an oversold market and
a 52-week low.
Fundamental
and technical analysis is essentially what separates one market
from another. It is these analytic tools that assist investors in
making intelligent and timely investment decisions. Staff
at TimelessWealth.net recognize the importance of timely
trading and investing ideas. It is upon these principles that
we’ve issued a technical trade idea with RHI Entertainment, Inc.
(NASDAQ: RHIE). We strongly encourage that our members review this
overlooked trading idea with additional research.
Subscribe to our Free Penny Stocks Alerts Newsletter
 Join Us
|
