American Railcar Industries (ARII) Is Today's Perilous Reversal 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 American Railcar Industries (ARII) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified American Railcar Industries as such a stock due to the following factors:
- ARII has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.3 million.
- ARII has traded 161,945 shares today.
- ARII is down 14.1% today.
- ARII was up 5.8% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in ARII with the Ticky from Trade-Ideas. See the FREE profile for ARII NOW at Trade-IdeasMore details on ARII: American Railcar Industries, Inc. designs and manufactures hopper and tank railcars in North America. It operates through three segments: Manufacturing, Railcar Leasing, and Railcar Services. The stock currently has a dividend yield of 2.2%. ARII has a PE ratio of 17.9. Currently there are no analysts that rate American Railcar Industries a buy, 1 analyst rates it a sell, and 5 rate it a hold.The average volume for American Railcar Industries has been 314,000 shares per day over the past 30 days. American Railcar has a market cap of $1.4 billion and is part of the services sector and transportation industry. The stock has a beta of 2.79 and a short float of 21.6% with 8.94 days to cover. Shares are up 43.5% year-to-date as of the close of trading on Wednesday.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 American Railcar Industries as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.Highlights from the ratings report include:
- The current debt-to-equity ratio, 0.45, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.46, which illustrates the ability to avoid short-term cash problems.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Machinery industry and the overall market, AMERICAN RAILCAR INDS INC's return on equity exceeds that of both the industry average and the S&P 500.
- Compared to its closing price of one year ago, ARII's share price has jumped by 67.42%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ARII should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- AMERICAN RAILCAR INDS INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AMERICAN RAILCAR INDS INC increased its bottom line by earning $4.07 versus $2.99 in the prior year. This year, the market expects an improvement in earnings ($4.70 versus $4.07).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.1%. Since the same quarter one year prior, revenues slightly dropped by 5.0%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- You can view the full American Railcar Industries 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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