Today's Perilous Reversal Stock: Copa Holdings (CPA)
Trade-Ideas LLC identified
(
) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Copa Holdings as such a stock due to the following factors:
- CPA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $48.1 million.
- CPA has traded 93,059 shares today.
- CPA is down 3% today.
- CPA was up 6.3% yesterday.
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More details on CPA:
Copa Holdings, S.A. provides airline passenger and cargo services in Latin America. It offers services within Colombia; and international flights from various cities in Colombia to Panama, Venezuela, Ecuador, Mexico, Cuba, Guatemala, and Costa Rica. The stock currently has a dividend yield of 6.2%. CPA has a PE ratio of 7. Currently there are 3 analysts that rate Copa Holdings a buy, no analysts rate it a sell, and 6 rate it a hold.
The average volume for Copa Holdings has been 855,700 shares per day over the past 30 days. Copa has a market cap of $1.8 billion and is part of the services sector and transportation industry. The stock has a beta of 2.37 and a short float of 13.2% with 5.10 days to cover. Shares are down 44% year-to-date as of the close of trading on Monday.
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Analysis:
rates Copa Holdings as a
. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.
Highlights from the ratings report include:
- The current debt-to-equity ratio, 0.60, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.81 is somewhat weak and could be cause for future problems.
- CPA, with its decline in revenue, underperformed when compared the industry average of 5.6%. Since the same quarter one year prior, revenues fell by 17.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 53.35%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 90.60% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- 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 Airlines industry and the overall market, COPA HOLDINGS SA's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- The gross profit margin for COPA HOLDINGS SA is rather low; currently it is at 15.72%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.13% significantly trails the industry average.
- You can view the full Copa Holdings Ratings Report.
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