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Trade-Ideas: Allison Transmission Holdings (ALSN) Is Today's New Lifetime High Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Allison Transmission Holdings ( ALSN) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Allison Transmission Holdings as such a stock due to the following factors:

  • ALSN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.5 million.
  • ALSN has traded 311,115 shares today.
  • ALSN is trading at a new lifetime high.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in ALSN with the Ticky from Trade-Ideas. See the FREE profile for ALSN NOW at Trade-Ideas

More details on ALSN:

Allison Transmission Holdings, Inc., together with its subsidiaries, engages in the design and manufacture of commercial and military fully-automatic transmissions and hybrid-propulsion systems for transit buses. The stock currently has a dividend yield of 1.9%. ALSN has a PE ratio of 39.9. Currently there are 3 analysts that rate Allison Transmission Holdings a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Allison Transmission Holdings has been 516,100 shares per day over the past 30 days. Allison Transmission has a market cap of $4.6 billion and is part of the consumer goods sector and automotive industry. Shares are up 21.2% year to date as of the close of trading on Thursday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Allison Transmission Holdings as a hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and generally higher debt management risk.

Highlights from the ratings report include:

  • Net operating cash flow has increased to $129.70 million or 21.32% when compared to the same quarter last year. In addition, ALLISON TRANSMISSION HLDGS has also modestly surpassed the industry average cash flow growth rate of 12.82%.
  • The gross profit margin for ALLISON TRANSMISSION HLDGS is rather high; currently it is at 53.93%. Regardless of ALSN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ALSN's net profit margin of 9.86% compares favorably to the industry average.
  • ALSN, with its decline in revenue, underperformed when compared the industry average of 7.4%. Since the same quarter one year prior, revenues slightly dropped by 8.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. In comparison to the other companies in the Auto Components industry and the overall market, ALLISON TRANSMISSION HLDGS's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Auto Components industry. The net income has significantly decreased by 87.8% when compared to the same quarter one year ago, falling from $412.80 million to $50.50 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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