Today's Dead Cat Bounce Stock: Treehouse Foods (THS)
Trade-Ideas LLC identified
(
) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Treehouse Foods as such a stock due to the following factors:
- THS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $58.3 million.
- THS has traded 223,341 shares today.
- THS is up 3.3% today.
- THS was down 5.6% yesterday.
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More details on THS:
TreeHouse Foods, Inc. operates as a food and beverage manufacturer in the United States and Canada. It operates through North American Retail Grocery, Food Away From Home, and Industrial and Export segments. THS has a PE ratio of 36. Currently there are 9 analysts that rate Treehouse Foods a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for Treehouse Foods has been 473,800 shares per day over the past 30 days. Treehouse has a market cap of $3.7 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 0.61 and a short float of 8.6% with 4.58 days to cover. Shares are down 5.5% year-to-date as of the close of trading on Monday.
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Analysis:
rates Treehouse Foods as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share and compelling growth in net income. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 9.3%. Since the same quarter one year prior, revenues rose by 20.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Net operating cash flow has increased to $67.20 million or 41.39% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 2.76%.
- TREEHOUSE FOODS INC has improved earnings per share by 26.3% 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, TREEHOUSE FOODS INC reported lower earnings of $2.20 versus $2.34 in the prior year. This year, the market expects an improvement in earnings ($3.08 versus $2.20).
- The debt-to-equity ratio is somewhat low, currently at 0.75, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.76 is somewhat weak and could be cause for future problems.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Food Products industry average, but is greater than that of the S&P 500. The net income increased by 44.1% when compared to the same quarter one year prior, rising from $21.76 million to $31.36 million.
- You can view the full Treehouse Foods Ratings Report.
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