Weak On High Volume: Middleby (MIDD)
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 weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Middleby as such a stock due to the following factors:
- MIDD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $29.1 million.
- MIDD has traded 257,327 shares today.
- MIDD is trading at 28.82 times the normal volume for the stock at this time of day.
- MIDD is trading at a new low 7.05% below yesterday's close.
'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.
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More details on MIDD:
The Middleby Corporation designs, manufactures, markets, distributes, and services commercial foodservice and food processing, and residential kitchen equipment in the United States, Canada, Asia, Europe, the Middle East, and Latin America. MIDD has a PE ratio of 31.8. Currently there are 3 analysts that rate Middleby a buy, no analysts rate it a sell, and none rate it a hold.
The average volume for Middleby has been 260,800 shares per day over the past 30 days. Middleby has a market cap of $6.2 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.05 and a short float of 1.4% with 2.62 days to cover. Shares are up 7.9% year-to-date as of the close of trading on Tuesday.
Analysis:
rates Middleby as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 1.4%. Since the same quarter one year prior, revenues rose by 12.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- MIDDLEBY CORP has improved earnings per share by 44.5% 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, MIDDLEBY CORP increased its bottom line by earning $2.73 versus $2.17 in the prior year. This year, the market expects an improvement in earnings ($3.42 versus $2.73).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 45.8% when compared to the same quarter one year prior, rising from $40.94 million to $59.71 million.
- 42.79% is the gross profit margin for MIDDLEBY CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 14.76% is above that of the industry average.
- Net operating cash flow has significantly increased by 72.42% to $102.71 million when compared to the same quarter last year. In addition, MIDDLEBY CORP has also vastly surpassed the industry average cash flow growth rate of -12.41%.
- You can view the full Middleby Ratings Report.
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