TV Station Chain Sinclair Shaping Potential Cup Base

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With the market back in a confirmed uptrend, investors should be looking for top-rated stocks in or forming new bases.

Sinclair Broadcast Group ( SBGI ) 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 ( FSCI ) for $373.3 million. The deal would give it 20 TV stations. That followed its February buyout of 18 TV stations from Barrington Broadcast Group.

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 double-digit growth.

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%.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: FSCI , SBGI

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