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Shaw Communications Jumps on 2nd-Quarter Results

- By Alberto Abaterusso

Shares of Shaw Communications Inc. (SJR) were up 2.92% to $21.50 in premarket trading on Tuesday after reporting a positive switch in the bottom line for the second quarter of fiscal 2019, thanks to ongoing growth in the wireline and wireless segments.

The Canadian telecommunications company posted GAAP earnings of 30 Canadian dollar cents ($0.23) per share from the loss of 35 Canadian dollar cents recorded in the prior-year quarter.

Revenue was 1.32 billion Canadian dollars, or $1 billion, which reflected a nearly 1% decrease year-over-year.

Second quarter results were mainly driven by post-paid subscriber net additions of 65,000 and by consumer internet net additions of 11,100.

For full fiscal 2019, Shaw Communications forecast that consolidated operating income before restructuring costs and amortization will grow 4-6% from fiscal 2018.

Shaw Communications shares traded at $20.9 at close Monday for a market capitalization of $10.6 billion. The share price increased 9% for the past year through April 8 to above the 200-, 100- and 50-day simple moving average lines. The closing price on Monday was 19.4% above the 52-week low of $17.50 and 2.9% below the 52-week high of $21.50.

The 14-day Relative Strength Indicator of 58.07 suggests the stock is neither overbought nor oversold.

The Peter Lynch chart suggests the stock is expensive.

Wall Street issued an overweight recommendation rating on shares of Shaw Communications, meaning analysts foresee the stock outperforming either the industry or the overall market within 52 weeks with an average target price of $23.03 per share.

Disclosure: I have no positions in any securities mentioned.

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This article first appeared on GuruFocus.