With the market back in a confirmed uptrend, investors should
be looking for top-rated stocks in or forming new bases.
Sinclair Broadcast Group (
) is working on a new pattern. Although it has now consolidated
for a full five weeks, it's not in a flat base. The correction in
a flat base has to be 15% or less. Sinclair has pulled back as
much as 19% from its May 10 record high.
The stock may end up forming a cup, which will require a
little more time. Cups need at least six weeks to form.
Since the beginning of the year, the stock has been on a tear
and has more than doubled in price. Sinclair jumped 7% last week
and regained its 10-week moving average.
The Hunt Valley, Md.-based firm runs TV stations across the
country. It's been busy scooping up a barrage of stations and
other broadcasting companies. In April, the company agreed to
buyFisher Communications (
) for $373.3 million. The deal would give it 20 TV stations. That
followed its February buyout of 18 TV stations from Barrington
Sinclair isn't a typical income stock. In recent years, its
earnings history has been rocky. In the past five years, profit
has ranged from falling by 2% to being up 187%.
In April, Sinclair reported first-quarter earnings from
continuing operations that tumbled 44% to 20 cents a share. A
sharp jump in expenses weighed on its bottom line. But sales
jumped 27% to $282.6 million -- the fifth straight period of
Sinclair currently pays a quarterly dividend of 15 cents a
share. It last hiked the distribution by 25% in August from 12
cents a share.
On an annual basis, Sinclair pays 60 cents a share, giving it
a yield of about 2.2%.