Trade-Ideas: Johnson Controls (JCI) Is Today's Momo Momentum Stock

Trade-Ideas LLC identified Johnson Controls (JCI) as a momo momentum candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Johnson Controls

(

JCI

) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Johnson Controls as such a stock due to the following factors:

  • JCI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $209.3 million.
  • JCI has a PE ratio of 66.
  • JCI is currently in the upper 30% of its 1-year range.
  • JCI is in the upper 25% of its 20-day range.
  • JCI is in the upper 35% of its 5-day range.
  • JCI is currently trading above yesterday's high.
  • JCI has experienced a gap between today's open and yesterday's close of 0.8%.

'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.

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More details on JCI:

Johnson Controls, Inc. operates as a diversified technology and industrial company worldwide. The stock currently has a dividend yield of 2.6%. JCI has a PE ratio of 66. Currently there are 7 analysts that rate Johnson Controls a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Johnson Controls has been 4.7 million shares per day over the past 30 days. Johnson Controls has a market cap of $28.4 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 1.63 and a short float of 4.7% with 6.26 days to cover. Shares are up 11.7% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Johnson Controls as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:

  • JOHNSON CONTROLS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, JOHNSON CONTROLS INC increased its bottom line by earning $2.16 versus $2.07 in the prior year. This year, the market expects an improvement in earnings ($3.91 versus $2.16).
  • The debt-to-equity ratio is somewhat low, currently at 0.70, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that JCI's debt-to-equity ratio is low, the quick ratio, which is currently 0.54, displays a potential problem in covering short-term cash needs.
  • The share price of JOHNSON CONTROLS INC has not done very well: it is down 16.06% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
  • 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 Auto Components industry. The net income has significantly decreased by 200.2% when compared to the same quarter one year ago, falling from $529.00 million to -$530.00 million.

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