Today's Pre-Market Mover With Heavy Volume: Toll Brothers (TOL)

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 Toll Brothers ( TOL) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Toll Brothers as such a stock due to the following factors:

  • TOL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $100.8 million.
  • TOL traded 346,895 shares today in the pre-market hours as of 8:43 AM, representing 11.1% of its average daily volume.

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More details on TOL:

Toll Brothers, Inc., together with its subsidiaries, designs, builds, markets, and arranges finance for detached and attached homes in luxury residential communities. It is also involved in building or converting existing rental apartment buildings into high-, mid-, and low-rise luxury homes. TOL has a PE ratio of 11.3. Currently there are 7 analysts that rate Toll Brothers a buy, 2 analysts rate it a sell, and 5 rate it a hold.

The average volume for Toll Brothers has been 3.7 million shares per day over the past 30 days. The stock has a beta of 1.38 and a short float of 8.3% with 3.40 days to cover. Shares are down 0.3% year to date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Toll Brothers as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • TOL's revenue growth has slightly outpaced the industry average of 23.1%. Since the same quarter one year prior, revenues rose by 25.4%. 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.
  • The debt-to-equity ratio is somewhat low, currently at 0.81, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Household Durables industry and the overall market on the basis of return on equity, TOLL BROTHERS INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • TOLL BROTHERS INC's earnings per share declined by 27.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, TOLL BROTHERS INC increased its bottom line by earning $2.79 versus $0.24 in the prior year. For the next year, the market is expecting a contraction of 71.3% in earnings ($0.80 versus $2.79).
  • The gross profit margin for TOLL BROTHERS INC is rather low; currently it is at 22.23%. Regardless of TOL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, TOL's net profit margin of 6.44% compares favorably to the industry average.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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