Trade-Ideas LLC identified

Eagle Materials

(

EXP

) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Eagle Materials as such a stock due to the following factors:

  • EXP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $73.1 million.
  • EXP has traded 139,273 shares today.
  • EXP is trading at 3.50 times the normal volume for the stock at this time of day.
  • EXP is trading at a new high 3.08% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into 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. 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 EXP:

Eagle Materials Inc. produces and sells construction products and building materials used in residential, industrial, commercial, and infrastructure construction; and products used in oil and natural gas extraction in the United States. The stock currently has a dividend yield of 0.6%. EXP has a PE ratio of 17. Currently there are 3 analysts that rate Eagle Materials a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Eagle Materials has been 824,700 shares per day over the past 30 days. Eagle has a market cap of $3.3 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.07 and a short float of 4.2% with 1.78 days to cover. Shares are down 13.7% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Eagle Materials as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and increase in net income. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 4.1%. Since the same quarter one year prior, revenues slightly increased by 7.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • 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 Construction Materials industry and the overall market, EAGLE MATERIALS INC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • EAGLE MATERIALS INC reported flat earnings per share in the most recent quarter. 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, EAGLE MATERIALS INC increased its bottom line by earning $3.71 versus $2.48 in the prior year. This year, the market expects an improvement in earnings ($3.90 versus $3.71).
  • Despite currently having a low debt-to-equity ratio of 0.50, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.86 is weak.
  • The gross profit margin for EAGLE MATERIALS INC is currently lower than what is desirable, coming in at 29.96%. Regardless of EXP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, EXP's net profit margin of 13.25% significantly outperformed against the industry.

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