Trade-Ideas LLC identified

Textron

(

TXT

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

  • TXT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $110.6 million.
  • TXT has traded 1.5 million shares today.
  • TXT is up 3.1% today.
  • TXT was down 13.4% yesterday.

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More details on TXT:

Textron Inc. operates in the aircraft, defense, industrial, and finance businesses worldwide. It operates through five segments: Textron Aviation, Bell, Textron Systems, Industrial, and Finance. The stock currently has a dividend yield of 0.2%. TXT has a PE ratio of 15. Currently there are 7 analysts that rate Textron a buy, no analysts rate it a sell, and 1 rates it a hold.

TheStreet Recommends

The average volume for Textron has been 1.8 million shares per day over the past 30 days. Textron has a market cap of $10.3 billion and is part of the industrial goods sector and aerospace/defense industry. The stock has a beta of 1.45 and a short float of 2.1% with 1.66 days to cover. Shares are down 10.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Textron as a

buy

. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • TEXTRON INC has improved earnings per share by 10.5% 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, TEXTRON INC increased its bottom line by earning $2.15 versus $1.75 in the prior year. This year, the market expects an improvement in earnings ($2.50 versus $2.15).
  • 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 Aerospace & Defense industry average. The net income increased by 10.7% when compared to the same quarter one year prior, going from $159.00 million to $176.00 million.
  • The debt-to-equity ratio is somewhat low, currently at 0.80, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Aerospace & Defense industry and the overall market on the basis of return on equity, TEXTRON INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.

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