Beazer Homes USA (BZH) Showing Signs Of Perilous Reversal Today

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

  • BZH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $17.1 million.
  • BZH has traded 267,676 shares today.
  • BZH is down 3.2% today.
  • BZH was up 6% yesterday.

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More details on BZH:

Beazer Homes USA, Inc. designs, builds, and sells single-family and multi-family homes. The company offers homes for entry-level, move-up, or retirement-oriented buyers. It also engages in rental of previously owned homes that are purchased and improved by the company. The stock currently has a dividend yield of 2.4%. Currently there are 3 analysts that rate Beazer Homes USA a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Beazer Homes USA has been 904,200 shares per day over the past 30 days. Beazer Homes USA has a market cap of $452.9 million and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 3.44 and a short float of 34.6% with 9.11 days to cover. Shares are up 6.9% year to date as of the close of trading on Thursday.

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 Beazer Homes USA as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, weak operating cash flow and poor profit margins.

Highlights from the ratings report include:
  • The debt-to-equity ratio is very high at 6.60 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • Net operating cash flow has significantly decreased to -$121.86 million or 361.82% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The gross profit margin for BEAZER HOMES USA INC is rather low; currently it is at 17.21%. Regardless of BZH's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -1.84% trails the industry average.
  • 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, BEAZER HOMES USA INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Household Durables industry average, but is greater than that of the S&P 500. The net income increased by 85.5% when compared to the same quarter one year prior, rising from -$39.88 million to -$5.79 million.

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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