NEW BEARISH Plays
Tribune Media Co. - TRCO - close: 54.55 change: -1.29
Stop Loss: 56.65
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Entry on January -- at $---.--
Listed on January 20, 2015
Time Frame: 8 to 12 weeks
Average Daily Volume = 501 thousand
New Positions: Yes, see below
Why We Like It:
Traditional television is dead. That's been the story for a long time with falling viewership in traditional television for several years. Yet that didn't stop a big rally in shares of TV companies like CBS and TRCO in 2013.
According to the company's marketing material, "Tribune Media Company (TRCO) is home to a diverse portfolio of television and digital properties driven by quality news, entertainment and sports programming. Tribune Media is comprised of Tribune Broadcasting's 42 owned or operated local television stations reaching over 50 million households, national entertainment network WGN America, available in approximately 71 million households, Tribune Studios, and Tribune Digital Ventures, including Gracenote, one of the world's leading sources of TV and music metadata powering electronic program guides in televisions, automobiles and mobile devices. Tribune Media also includes Chicago's WGN-AM, the national multicast networks Antenna TV and THIS TV. Additionally, the Company owns and manages a significant number of real estate properties across the U.S. and holds other strategic investments in media."
Last year was a rough one for TRCO. The stock peaked about $90 in July. It's now down about -40% from that high. We could argue that it's all about the TV advertising market. The Wall Street Journal ran an article in November last year suggesting that the entire industry is seeing a structural slowdown as more and more ad spending moves to digital outlets.
Yet the last couple of earnings reports from TRCO came in significantly above expectations. Revenues are growing year over year. So is TRCO an exception or were the revenue comparisons to a year ago just really, really bad?
If price is truth then investors are bearish on TRCO. The stock's big oversold bounce in October last year turned into a bearish double top near $70.00. More recently shares have been sinking with a steady trend of lower highs. Today the point & figure chart is bearish and forecasting at $42 target.
Shares of TRCO were showing relative weakness again today with a -2.3% drop and a breakdown under support at $55.00. The intraday low was $54.23. Tonight I'm suggesting a trigger to open bearish positions at $53.95.
Trigger @ $53.95
- Suggested Positions -
Short TRCO stock @ $53.95