Today's Dead Cat Bounce Stock: Motorola Solutions (MSI)

Trade-Ideas LLC identified Motorola Solutions (MSI) as a "dead cat bounce" (down big yesterday but up big today) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Motorola Solutions

(

MSI

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Motorola Solutions as such a stock due to the following factors:

  • MSI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $125.7 million.
  • MSI has traded 849,219 shares today.
  • MSI is up 3% today.
  • MSI was down 8.6% yesterday.

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More details on MSI:

Motorola Solutions, Inc. provides mission-critical communication infrastructure, devices, software, and services in North America, Latin America, the Asia Pacific, the Middle East, Europe, and Africa. The company operates in two segments, Products and Services. The stock currently has a dividend yield of 1.9%. Currently there are 2 analysts that rate Motorola Solutions a buy, 3 analysts rate it a sell, and 6 rate it a hold.

The average volume for Motorola Solutions has been 2.3 million shares per day over the past 30 days. Motorola has a market cap of $14.8 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 0.23 and a short float of 5.1% with 5.77 days to cover. Shares are down 2.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Motorola Solutions 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 expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:

  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • MOTOROLA SOLUTIONS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. 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, MOTOROLA SOLUTIONS INC swung to a loss, reporting -$3.12 versus $3.47 in the prior year. This year, the market expects an improvement in earnings ($3.34 versus -$3.12).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.4%. Since the same quarter one year prior, revenues slightly dropped by 1.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • 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 Communications Equipment industry. The net income has significantly decreased by 82.6% when compared to the same quarter one year ago, falling from $824.00 million to $143.00 million.
  • Net operating cash flow has decreased to $140.00 million or 19.07% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, MOTOROLA SOLUTIONS INC has marginally lower results.

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