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Trade-Ideas LLC identified

Rayonier Advanced Materials

(

RYAM

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

  • RYAM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $19.6 million.
  • RYAM has traded 194,018 shares today.
  • RYAM is up 3.1% today.
  • RYAM was down 5.1% yesterday.

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More details on RYAM:

Rayonier Advanced Materials Inc. manufactures and sells cellulose specialty products in the United States, China, Japan, Canada, Europe, Latin America, other Asian countries, and internationally. The stock currently has a dividend yield of 2%. RYAM has a PE ratio of 9. Currently there is 1 analyst that rates Rayonier Advanced Materials a buy, 2 analysts rate it a sell, and none rate it a hold.

The average volume for Rayonier Advanced Materials has been 541,200 shares per day over the past 30 days. Rayonier Advanced has a market cap of $604.6 million and is part of the basic materials sector and chemicals industry. Shares are up 40.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Rayonier Advanced Materials as a

sell

. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk and poor profit margins.

Highlights from the ratings report include:

  • The debt-to-equity ratio is very high at 277.44 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, RYAM's quick ratio is somewhat strong at 1.37, demonstrating the ability to handle short-term liquidity needs.
  • The gross profit margin for RAYONIER ADVANCED MATERIALS is currently lower than what is desirable, coming in at 28.62%. Regardless of RYAM'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 9.59% trails the industry average.
  • RAYONIER ADVANCED MATERIALS 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 year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, RAYONIER ADVANCED MATERIALS increased its bottom line by earning $1.30 versus $0.02 in the prior year. For the next year, the market is expecting a contraction of 12.5% in earnings ($1.14 versus $1.30).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 4.1%. Since the same quarter one year prior, revenues slightly dropped by 1.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is higher, and it has outperformed the rise in the S&P 500 over the same period. Regardless of the rise in share value over the previous year, we feel that the risks involved in investing in this stock do not compensate for any future upside potential.

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