Mueller Water Products (MWA) In A Perilous Reversal - TheStreet

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

Mueller Water Products

(

MWA

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

  • MWA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.0 million.
  • MWA has traded 53,586 shares today.
  • MWA is down 4.8% today.
  • MWA was up 6.1% yesterday.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in MWA with the Ticky from Trade-Ideas. See the FREE profile for MWA NOW at Trade-Ideas

More details on MWA:

Mueller Water Products, Inc. manufactures and markets products and services used in the transmission, distribution, and measurement of water primarily in the United States and Canada. The company operates through two segments, Mueller Co. and Anvil. The Mueller Co. The stock currently has a dividend yield of 0.8%. MWA has a PE ratio of 31.8. Currently there are 8 analysts that rate Mueller Water Products a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Mueller Water Products has been 954,400 shares per day over the past 30 days. Mueller Water has a market cap of $1.5 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.64 and a short float of 2.6% with 2.52 days to cover. Shares are up 1.6% year-to-date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Mueller Water Products as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:

  • MWA's revenue growth has slightly outpaced the industry average of 1.1%. Since the same quarter one year prior, revenues slightly increased by 9.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • MUELLER WATER PRODUCTS INC 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. This trend suggests that the performance of the business is improving. During the past fiscal year, MUELLER WATER PRODUCTS INC increased its bottom line by earning $0.34 versus $0.22 in the prior year. This year, the market expects an improvement in earnings ($0.45 versus $0.34).
  • 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, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Machinery industry and the overall market on the basis of return on equity, MUELLER WATER PRODUCTS INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • Currently the debt-to-equity ratio of 1.56 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Regardless of the company's weak debt-to-equity ratio, MWA has managed to keep a strong quick ratio of 1.72, which demonstrates the ability to cover short-term cash needs.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

null