Trade-Ideas LLC identified

Textainer Group Holdings

(

TGH

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

  • TGH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.7 million.
  • TGH has traded 75,641 shares today.
  • TGH is down 3.6% today.
  • TGH was up 8.8% yesterday.

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More details on TGH:

Textainer Group Holdings Limited, together with its subsidiaries, engages in the purchase, ownership, management, leasing, and disposal of a fleet of intermodal containers worldwide. It operates through three segments: Container Ownership, Container Management, and Container Resale. The stock currently has a dividend yield of 11.9%. TGH has a PE ratio of 5. Currently there is 1 analyst that rates Textainer Group Holdings a buy, 2 analysts rate it a sell, and 6 rate it a hold.

The average volume for Textainer Group Holdings has been 512,400 shares per day over the past 30 days. Textainer Group has a market cap of $897.8 million and is part of the services sector and diversified services industry. The stock has a beta of 1.48 and a short float of 16.7% with 4.97 days to cover. Shares are down 50.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Textainer Group Holdings as a

hold

. The company's strengths can be seen in multiple areas, such as its increase in net income, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:

  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Trading Companies & Distributors industry average. The net income increased by 21.9% when compared to the same quarter one year prior, going from $33.01 million to $40.26 million.
  • The gross profit margin for TEXTAINER GROUP HOLDINGS LTD is currently very high, coming in at 88.12%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 29.13% significantly outperformed against the industry average.
  • Net operating cash flow has slightly increased to $88.21 million or 4.85% when compared to the same quarter last year. Despite an increase in cash flow, TEXTAINER GROUP HOLDINGS LTD's cash flow growth rate is still lower than the industry average growth rate of 28.23%.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Trading Companies & Distributors industry and the overall market on the basis of return on equity, TEXTAINER GROUP HOLDINGS LTD has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • TGH'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 50.15%, 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.

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