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 "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified AAR as such a stock due to the following factors:
- AIR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.4 million.
- AIR has traded 540,604 shares today.
- AIR is up 3.3% today.
- AIR was down 11.8% yesterday.
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More details on AIR:
AAR CORP. provides products and services to commercial aviation, government, and defense markets worldwide. The company operates through two segments, Aviation Services and Technology Products. The stock currently has a dividend yield of 1.1%. AIR has a PE ratio of 16.1. Currently there is 1 analyst that rates AAR a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for AAR has been 225,700 shares per day over the past 30 days. AAR has a market cap of $1.1 billion and is part of the industrial goods sector and aerospace/defense industry. The stock has a beta of 2.14 and a short float of 8.7% with 4.92 days to cover. Shares are down 11.8% year-to-date as of the close of trading on Wednesday.
rates AAR as a
. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- AAR CORP's earnings per share declined by 20.0% 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, AAR CORP increased its bottom line by earning $1.83 versus $1.36 in the prior year. This year, the market expects an improvement in earnings ($1.87 versus $1.83).
- AIR, with its decline in revenue, underperformed when compared the industry average of 1.3%. Since the same quarter one year prior, revenues slightly dropped by 8.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- AIR's debt-to-equity ratio of 0.62 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Aerospace & Defense industry and the overall market, AAR CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full AAR Ratings Report.