Trade-Ideas LLC identified

Masonite International

(

DOOR

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

  • DOOR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $19.7 million.
  • DOOR has traded 51,637 shares today.
  • DOOR is down 3.2% today.
  • DOOR was up 14.3% yesterday.

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More details on DOOR:

Masonite International Corporation designs, manufactures, and sells interior and exterior doors worldwide. The company offers molded panel, flush, stile and rail, routed medium-density fiberboard (MDF), steel, or fiberglass residential doors. Currently there are 6 analysts that rate Masonite International a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Masonite International has been 243,400 shares per day over the past 30 days. Masonite International has a market cap of $1.5 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 0.80 and a short float of 5.4% with 3.74 days to cover. Shares are down 5.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Masonite International as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. 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:

  • The debt-to-equity ratio is somewhat low, currently at 0.74, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.28, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has significantly increased by 74.27% to $53.23 million when compared to the same quarter last year. In addition, MASONITE INTERNATIONAL CORP has also vastly surpassed the industry average cash flow growth rate of 18.50%.
  • DOOR, with its decline in revenue, slightly underperformed the industry average of 5.8%. Since the same quarter one year prior, revenues slightly dropped by 0.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 Building Products industry and the overall market, MASONITE INTERNATIONAL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • 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 63.4% when compared to the same quarter one year ago, falling from -$9.97 million to -$16.28 million.

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