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 LKQ Corporation ( LKQ) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified LKQ Corporation as such a stock due to the following factors:
- LKQ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $49.8 million.
- LKQ has traded 3.1 million shares today.
- LKQ is down 3.3% today.
- LKQ was up 5.5% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in LKQ with the Ticky from Trade-Ideas. See the FREE profile for LKQ NOW at Trade-Ideas More details on LKQ: LKQ Corporation, together with its subsidiaries, provides replacement parts, components, and systems needed to repair vehicles, primarily cars and trucks in the United States, the United Kingdom, Canada, Mexico, and Central America. LKQ has a PE ratio of 34.4. Currently there are 5 analysts that rate LKQ Corporation a buy, no analysts rate it a sell, and 3 rate it a hold. The average volume for LKQ Corporation has been 1.2 million shares per day over the past 30 days. LKQ has a market cap of $9.5 billion and is part of the consumer goods sector and automotive industry. Shares are up 49.8% year to date as of the close of trading on Monday. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more. TheStreetRatings.com Analysis: TheStreet Quant Ratings rates LKQ Corporation as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, good cash flow from operations, solid stock price performance and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 9.2%. Since the same quarter one year prior, revenues rose by 24.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- LKQ CORP has improved earnings per share by 16.3% 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, LKQ CORP increased its bottom line by earning $0.88 versus $0.71 in the prior year. This year, the market expects an improvement in earnings ($1.09 versus $0.88).
- Net operating cash flow has significantly increased by 849.22% to $103.06 million when compared to the same quarter last year. In addition, LKQ CORP has also vastly surpassed the industry average cash flow growth rate of 41.80%.
- 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 68.86% over the past year, a rise that has exceeded that of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Distributors industry average. The net income increased by 18.3% when compared to the same quarter one year prior, going from $64.00 million to $75.72 million.
- You can view the full LKQ Corporation Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.