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
) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Mohawk Industries as such a stock due to the following factors:
- MHK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $157.9 million.
- MHK has a PE ratio of 33.3.
- MHK is currently in the upper 30% of its 1-year range.
- MHK is in the upper 25% of its 20-day range.
- MHK is in the upper 35% of its 5-day range.
- MHK is currently trading above yesterday's high.
- MHK has experienced a gap between today's open and yesterday's close of 0.2%.
'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.
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More details on MHK:
Mohawk Industries, Inc., together with its subsidiaries, produces floor covering products for residential and commercial applications in the United States and for residential applications in Europe. The company operates through three segments: Mohawk, Dal-Tile, and Unilin. MHK has a PE ratio of 33.3. Currently there are 7 analysts that rate Mohawk Industries a buy, no analysts rate it a sell, and 3 rate it a hold.
The average volume for Mohawk Industries has been 776,100 shares per day over the past 30 days. Mohawk has a market cap of $9.4 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.33 and a short float of 2.7% with 1.06 days to cover. Shares are up 42.9% year to date as of the close of trading on Friday.
rates Mohawk Industries as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, good cash flow from operations, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 23.1%. Since the same quarter one year prior, revenues rose by 34.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- MOHAWK INDUSTRIES INC has improved earnings per share by 11.3% 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, MOHAWK INDUSTRIES INC increased its bottom line by earning $3.60 versus $2.52 in the prior year. This year, the market expects an improvement in earnings ($6.23 versus $3.60).
- Net operating cash flow has slightly increased to $152.86 million or 9.14% when compared to the same quarter last year. In addition, MOHAWK INDUSTRIES INC has also vastly surpassed the industry average cash flow growth rate of -545.79%.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 53.00% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- The debt-to-equity ratio is somewhat low, currently at 0.62, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.98 is somewhat weak and could be cause for future problems.
- You can view the full Mohawk Industries Ratings Report.