Watch Out: Barbarians At The Gate For Thor Industries (THO)
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
(
) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Thor Industries as such a stock due to the following factors:
- THO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $22.8 million.
- THO has traded 75,028 shares today.
- THO traded in a range 211.2% of the normal price range with a price range of $2.27.
- THO traded above its daily resistance level (quality: 329 days, meaning that the stock is crossing a resistance level set by the last 329 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.
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More details on THO:
Thor Industries, Inc., through its subsidiaries, designs, manufactures, and sells a range of recreational vehicles, and related parts and accessories in the United States and Canada. It operates through two segments, Towable Recreational Vehicles and Motorized Recreational Vehicles. The stock currently has a dividend yield of 1.7%. THO has a PE ratio of 18.7. Currently there are 2 analysts that rate Thor Industries a buy, no analysts rate it a sell, and 3 rate it a hold.
The average volume for Thor Industries has been 369,100 shares per day over the past 30 days. Thor has a market cap of $3.3 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 1.03 and a short float of 3.8% with 4.22 days to cover. Shares are up 9.8% year-to-date as of the close of trading on Thursday.
Analysis:
rates Thor Industries as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 10.1%. Since the same quarter one year prior, revenues rose by 15.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- THO has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, THO has a quick ratio of 1.63, which demonstrates the ability of the company to cover short-term liquidity needs.
- THOR INDUSTRIES INC has improved earnings per share by 7.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, THOR INDUSTRIES INC increased its bottom line by earning $3.28 versus $2.86 in the prior year. This year, the market expects an improvement in earnings ($3.81 versus $3.28).
- Net operating cash flow has significantly increased by 754.68% to $50.03 million when compared to the same quarter last year. In addition, THOR INDUSTRIES INC has also vastly surpassed the industry average cash flow growth rate of -24.72%.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- You can view the full Thor Industries Ratings Report.
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