Allison Transmission Holdings (ALSN) Hits New Lifetime High 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 Allison Transmission Holdings ( ALSN) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Allison Transmission Holdings as such a stock due to the following factors:

  • ALSN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $17.9 million.
  • ALSN has traded 14,101 shares today.
  • ALSN is trading at a new lifetime high.

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More details on ALSN:

Allison Transmission Holdings, Inc. designs and manufactures automatic transmissions for medium- and heavy-duty commercial vehicles, and medium- and heavy-tactical U.S. military vehicles. The stock currently has a dividend yield of 1.7%. ALSN has a PE ratio of 40.1. Currently there are 6 analysts that rate Allison Transmission Holdings a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Allison Transmission Holdings has been 802,300 shares per day over the past 30 days. Allison Transmission has a market cap of $5.2 billion and is part of the consumer goods sector and automotive industry. Shares are up 2.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Allison Transmission Holdings as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, expanding profit margins and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, disappointing return on equity and premium valuation.

Highlights from the ratings report include:
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Auto Components industry average. The net income increased by 38.2% when compared to the same quarter one year prior, rising from $32.20 million to $44.50 million.
  • The gross profit margin for ALLISON TRANSMISSION HLDGS is rather high; currently it is at 54.81%. Regardless of ALSN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ALSN's net profit margin of 9.54% compares favorably to the industry average.
  • ALLISON TRANSMISSION HLDGS has improved earnings per share by 41.2% 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, ALLISON TRANSMISSION HLDGS increased its bottom line by earning $2.75 versus $0.56 in the prior year. For the next year, the market is expecting a contraction of 67.7% in earnings ($0.89 versus $2.75).
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Auto Components industry and the overall market, ALLISON TRANSMISSION HLDGS's return on equity is below that of both the industry average and the S&P 500.

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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