American Woodmark Corporation (AMWD) Marked As A Dead Cat Bounce Stock

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

  • AMWD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $18.5 million.
  • AMWD has traded 122,414 shares today.
  • AMWD is up 3.3% today.
  • AMWD was down 5.4% yesterday.

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More details on AMWD:

American Woodmark Corporation engages in the manufacture and distribution of kitchen cabinets and vanities for the remodeling and new home construction markets in the United States. The stock currently has a dividend yield of 2.3%. AMWD has a PE ratio of 35.3. Currently there are 2 analysts that rate American Woodmark Corporation a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for American Woodmark Corporation has been 151,800 shares per day over the past 30 days. American Woodmark has a market cap of $559.0 million and is part of the consumer goods sector and consumer durables industry. The stock has a beta of 1.85 and a short float of 5.3% with 1.62 days to cover. Shares are up 33.1% year to date as of the close of trading on Tuesday.

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 American Woodmark Corporation 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, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 7.7%. Since the same quarter one year prior, revenues rose by 20.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • AMWD's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, AMWD has a quick ratio of 2.16, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The strong earnings growth this company has enjoyed -- up -- has apparently played a role in driving up its share price by a solid 32.47%. In addition, the rise in the general market has likely contributed to this stock's strong performance during this past year.Regarding the stock's future course, although almost any stock can fall in a broad market decline, AMWD should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • AMERICAN WOODMARK CORP reported significant earnings per share improvement 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, AMERICAN WOODMARK CORP turned its bottom line around by earning $0.66 versus -$1.45 in the prior year. This year, the market expects an improvement in earnings ($1.70 versus $0.66).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Building Products industry. The net income increased by 1086.3% when compared to the same quarter one year prior, rising from $0.56 million to $6.66 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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