Trade-Ideas LLC identified

Navistar International

(

NAV

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

  • NAV has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.7 million.
  • NAV has traded 144,544 shares today.
  • NAV is down 3.3% today.
  • NAV was up 9.1% yesterday.

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More details on NAV:

Navistar International Corporation manufactures and sells commercial and military trucks, diesel engines, and school and commercial buses; and provides service parts for trucks and diesel engines worldwide. Currently there are 4 analysts that rate Navistar International a buy, 1 analyst rates it a sell, and 10 rate it a hold.

The average volume for Navistar International has been 1.3 million shares per day over the past 30 days. Navistar International has a market cap of $870.6 million and is part of the consumer goods sector and automotive industry. The stock has a beta of 2.64 and a short float of 74.2% with 9.40 days to cover. Shares are up 31.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Navistar International as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and poor profit margins.

Highlights from the ratings report include:

  • NAV's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 62.50%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The gross profit margin for NAVISTAR INTERNATIONAL CORP is rather low; currently it is at 20.23%. Regardless of NAV's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -1.86% trails the industry average.
  • NAV, with its decline in revenue, underperformed when compared the industry average of 14.0%. Since the same quarter one year prior, revenues fell by 27.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has significantly increased by 51.65% to -$102.00 million when compared to the same quarter last year. In addition, NAVISTAR INTERNATIONAL CORP has also vastly surpassed the industry average cash flow growth rate of -24.55%.
  • NAVISTAR INTERNATIONAL CORP has improved earnings per share by 23.1% 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. This trend suggests that the performance of the business is improving. During the past fiscal year, NAVISTAR INTERNATIONAL CORP continued to lose money by earning -$2.29 versus -$7.65 in the prior year. This year, the market expects an improvement in earnings ($0.70 versus -$2.29).

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