Monday, 19 October 2015

Momentum Alert – Level 3 is Heading Higher

Level 3 Communications, Inc. (NYSE: LVLT)
Technology; Diversified Communication Services; BUY

The company's stock price has moved above the 25-day SMA and 50-day SMA in the past few weeks, indicating bullish momentum. Not only this, LVLT's chart also demonstrates a bullish divergence, which is a strong indication that the stock will head higher. With RSI standing below 70, there's room for a strong rally in coming weeks.

Based on fundamental, we rate Level 3 a strong buy. The company is exposed to the double digit growth prospects of IP traffic. Increasing bandwidth requirements enabled through high quality video content consumption bodes well for LVLT. Further, the growth is quite reasonably priced. Earnings are expected to grow at 65% p.a. during the next five while the stock trades around a forward PE of just 20. All in all, LVLT is a good pick in growth at a reasonable price arena.