Trade-Ideas LLC identified

American Railcar Industries

(

ARII

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified American Railcar Industries as such a stock due to the following factors:

  • ARII has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.7 million.
  • ARII has traded 155,956 shares today.
  • ARII is down 5.5% today.
  • ARII was up 15.3% yesterday.

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More details on ARII:

American Railcar Industries, Inc. designs and manufactures hopper and tank railcars in North America. It operates through three segments: Manufacturing, Railcar Leasing, and Railcar Services. The stock currently has a dividend yield of 3.2%. ARII has a PE ratio of 9. Currently there is 1 analyst that rates American Railcar Industries a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for American Railcar Industries has been 263,700 shares per day over the past 30 days. American Railcar has a market cap of $1.1 billion and is part of the services sector and transportation industry. The stock has a beta of 1.64 and a short float of 25.2% with 8.27 days to cover. Shares are up 12.1% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates American Railcar Industries as a

buy

. 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, notable return on equity and attractive valuation levels. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 20.3%. Since the same quarter one year prior, revenues slightly increased by 6.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • AMERICAN RAILCAR INDS INC has improved earnings per share by 24.1% 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, AMERICAN RAILCAR INDS INC increased its bottom line by earning $4.66 versus $4.07 in the prior year. This year, the market expects an improvement in earnings ($6.08 versus $4.66).
  • 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 23.2% when compared to the same quarter one year prior, going from $23.82 million to $29.36 million.
  • 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. When compared to other companies in the Machinery industry and the overall market, AMERICAN RAILCAR INDS INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.

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