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 "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Masco as such a stock due to the following factors:
- MAS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $128.1 million.
- MAS has traded 3.7 million shares today.
- MAS is trading at 3.03 times the normal volume for the stock at this time of day.
- MAS crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in MAS with the Ticky from Trade-Ideas. See the FREE profile for MAS NOW at Trade-Ideas
More details on MAS:
Masco Corporation manufactures, distributes, and installs home improvement and building products in North America and internationally. The stock currently has a dividend yield of 1.6%. MAS has a PE ratio of 23.6. Currently there are 8 analysts that rate Masco a buy, no analysts rate it a sell, and 9 rate it a hold.
The average volume for Masco has been 4.2 million shares per day over the past 30 days. Masco has a market cap of $8.2 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 2.17 and a short float of 3.2% with 1.93 days to cover. Shares are up 1.4% year-to-date as of the close of trading on Monday.
rates Masco as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, good cash flow from operations, solid stock price performance and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the ratings report include:
- MAS's revenue growth has slightly outpaced the industry average of 1.2%. Since the same quarter one year prior, revenues slightly increased by 5.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- MASCO CORP reported significant earnings per share improvement 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, MASCO CORP turned its bottom line around by earning $0.83 versus -$0.16 in the prior year. This year, the market expects an improvement in earnings ($1.01 versus $0.83).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Building Products industry. The net income increased by 78.2% when compared to the same quarter one year prior, rising from $78.00 million to $139.00 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Building Products industry and the overall market, MASCO CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- You can view the full Masco Ratings Report.