Trade-Ideas LLC identified

Armstrong World Industries

(

AWI

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Armstrong World Industries as such a stock due to the following factors:

  • AWI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $21.5 million.
  • AWI has traded 100,033 shares today.
  • AWI is trading at 6.73 times the normal volume for the stock at this time of day.
  • AWI is trading at a new low 4.18% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on AWI:

Armstrong World Industries, Inc. designs, manufactures, and sells flooring products and ceiling systems for use primarily in the construction and renovation of residential, commercial, and institutional buildings worldwide. AWI has a PE ratio of 63. Currently there are 4 analysts that rate Armstrong World Industries a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Armstrong World Industries has been 638,700 shares per day over the past 30 days. Armstrong World has a market cap of $2.3 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.53 and a short float of 6.3% with 5.74 days to cover. Shares are down 8.5% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Armstrong World Industries as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 11.6%. Since the same quarter one year prior, revenues slightly increased by 3.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Even though the current debt-to-equity ratio is 1.27, it is still below the industry average, suggesting that this level of debt is acceptable within the Building Products industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.91 is weak.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Building Products industry. The net income has significantly decreased by 121.2% when compared to the same quarter one year ago, falling from $46.60 million to -$9.90 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Building Products industry and the overall market, ARMSTRONG WORLD INDUSTRIES's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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