Trade-Ideas LLC identified

Trinity Industries

(

TRN

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

  • TRN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $67.8 million.
  • TRN has traded 482,757 shares today.
  • TRN is up 3% today.
  • TRN was down 5.7% yesterday.

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More details on TRN:

Trinity Industries, Inc. provides various products and services for the energy, transportation, chemical, and construction sectors in the United States and internationally. The stock currently has a dividend yield of 2%. TRN has a PE ratio of 6. Currently there are 2 analysts that rate Trinity Industries a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for Trinity Industries has been 2.1 million shares per day over the past 30 days. Trinity has a market cap of $3.3 billion and is part of the services sector and transportation industry. The stock has a beta of 2.10 and a short float of 9.7% with 4.53 days to cover. Shares are down 13.8% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Trinity Industries 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, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, a generally disappointing performance in the stock itself and poor profit margins.

Highlights from the ratings report include:

  • The debt-to-equity ratio is somewhat low, currently at 0.85, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
  • TRN, with its decline in revenue, underperformed when compared the industry average of 12.3%. Since the same quarter one year prior, revenues fell by 27.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The share price of TRINITY INDUSTRIES has not done very well: it is down 20.20% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Machinery industry. The net income has significantly decreased by 46.0% when compared to the same quarter one year ago, falling from $180.20 million to $97.20 million.

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