Trade-Ideas: Delphi Automotive (DLPH) Is Today's "Dead Cat Bounce" 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 Delphi Automotive (DLPH) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Delphi Automotive as such a stock due to the following factors:
- DLPH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $122.8 million.
- DLPH has traded 4.0 million shares today.
- DLPH is up 3% today.
- DLPH was down 5.2% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in DLPH with the Ticky from Trade-Ideas. See the FREE profile for DLPH NOW at Trade-IdeasMore details on DLPH: Delphi Automotive PLC, together with its subsidiaries, manufactures vehicle components; and provides electrical and electronic, powertrain, safety, and thermal technology solutions for the automotive and commercial vehicle markets worldwide. The stock currently has a dividend yield of 1.2%. DLPH has a PE ratio of 17.3. Currently there are 10 analysts that rate Delphi Automotive a buy, no analysts rate it a sell, and 2 rate it a hold.The average volume for Delphi Automotive has been 1.8 million shares per day over the past 30 days. Shares are up 50.4% year to date as of the close of trading on Monday.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 Delphi Automotive as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share and revenue growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 10.4%. Since the same quarter one year prior, revenues slightly increased by 6.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 81.93% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- DLPH's debt-to-equity ratio of 0.96 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.08 is sturdy.
- The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Auto Components industry average. The net income increased by 11.2% when compared to the same quarter one year prior, going from $330.00 million to $367.00 million.
- The gross profit margin for DELPHI AUTOMOTIVE PLC is rather low; currently it is at 20.87%. Regardless of DLPH's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, DLPH's net profit margin of 8.65% compares favorably to the industry average.
- You can view the full Delphi Automotive Ratings Report.
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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