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Trade-Ideas LLC identified

Monro Muffler Brake

(

MNRO

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Monro Muffler Brake as such a stock due to the following factors:

  • MNRO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $23.7 million.
  • MNRO has traded 85,216 shares today.
  • MNRO is up 3.3% today.
  • MNRO was down 7.3% yesterday.

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More details on MNRO:

Monro Muffler Brake, Inc. provides automotive undercar repair and tire services in the United States. The company offers a range of services on passenger cars, light trucks, and vans for brakes; mufflers and exhaust systems; and steering, drive train, suspension, and wheel alignment. The stock currently has a dividend yield of 0.9%. MNRO has a PE ratio of 35. Currently there are 4 analysts that rate Monro Muffler Brake a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Monro Muffler Brake has been 182,100 shares per day over the past 30 days. Monro Muffler Brake has a market cap of $2.2 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 0.57 and a short float of 12.2% with 8.76 days to cover. Shares are down 6.3% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Monro Muffler Brake as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • MNRO's revenue growth trails the industry average of 11.5%. Since the same quarter one year prior, revenues slightly increased by 1.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • 43.15% is the gross profit margin for MONRO MUFFLER BRAKE INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.37% trails the industry average.
  • Net operating cash flow has slightly increased to $36.26 million or 6.84% when compared to the same quarter last year. Despite an increase in cash flow, MONRO MUFFLER BRAKE INC's average is still marginally south of the industry average growth rate of 11.27%.
  • The current debt-to-equity ratio, 0.57, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.07 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • MONRO MUFFLER BRAKE INC's earnings per share declined by 6.1% 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, MONRO MUFFLER BRAKE INC increased its bottom line by earning $1.89 versus $1.67 in the prior year. This year, the market expects an improvement in earnings ($2.04 versus $1.89).

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