Over the past 6 months, a key resistance level has formed in Rogers Communications Inc. (RCI).
RCI is the largest wireless service provider in Canada, with more than 10 million subscribers, representing one third of the total Canadian market.
RCI has been benefiting from increased Internet subscribers and a shift in these subscribers to higher price tiers. The company should see growth through its investments in 5G spectrum and partnerships with real estate companies that support 5G infrastructure deployment.
The company reported its latest financial results on October 22nd, and beat analysts’ estimates for both earnings and revenue; but earnings were down 9.2% year over year. Revenues were down 2.1%. Sales are expected to be flat next year.
RCI’s debt level is high, with long-term debt $14.4 billion at the end of the third quarter, compared to only $1.7 Billion cash. The company has a solid profit margin of 11.4% and a current ratio of 1.1.
The company is reasonably priced with a P/E of 18.4. In terms of momentum, the stock has underperformed over the long-term, but has shown recent strength. RCI is rated a “Buy” in our POWR Ratings system, with a grade of “B” in Buy & Hold Grade and Peer Grade.
Take a look at the 1-year chart of RCI below with my added notations:
Chart of RCI provided by TradingView
Over the past six months, RCI has formed a key level of resistance at the $45 (red) mark. A trader could initiate a long position in RCI if the stock breaks through this resistance level and only after a solid close above $45.
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About the Author: Christian Tharp, CMT
Christian is an expert stock market coach at the Adam Mesh Trading Group who has mentored more than 4,000 traders and investors. He is a professional technical analyst that is a certified Chartered Market Technician (CMT), which is a designation awarded by the CMT Association. Christian is also the author of the daily online newsletter Todays Big Stock. More...
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