Starz could regain its upward trend after having run out of steam.

The group has strong fundamentals and its Surperformance ratings highlight its qualities in terms of profitability, business predictability and valuation. In fact, the company’s net margin is close to 15%, an interesting level for the broadcasting sector. In addition, analysts have been revising upward both their revenues and earnings estimates for the coming years. Nowadays, analysts expect an EPS of USD 2.19 for 2014 and USD 2.42 for 2015. That represents respectively +22% and +32% compared to their prevision one year ago. Finally, the entertainment group seems undervalued compared to its peers with a P/E ratio of 13.75 times 2014 estimates.

Starz follows an uptrend in the medium and long term, although, the last bearish movement has thrown it back near a major support level. The bottom ascending trendline that supports the stock prices represents an interesting entry point as it could enable the equity to resume its bullish trend. Moreover, weekly moving averages are still well oriented and militate for a rebound over this level.

Therefore, active investors could take a long position on this level in order to benefit of an interesting entry point. The target will then be USD 33.90 and a stop-loss order will be placed below the medium term support.