Perilous Reversal Watch: Ingredion (INGR)

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

  • INGR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $64.1 million.
  • INGR has traded 115,928 shares today.
  • INGR is down 3.1% today.
  • INGR was up 8% yesterday.

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More details on INGR:

Ingredion Incorporated, together with its subsidiaries, manufactures and sells starch and sweetener ingredients in North America, South America, the Asia Pacific, Europe, the Middle East, and Africa. The stock currently has a dividend yield of 2.9%. INGR has a PE ratio of 11.5. Currently there are 2 analysts that rate Ingredion a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Ingredion has been 661,200 shares per day over the past 30 days. Ingredion has a market cap of $4.5 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 1.44 and a short float of 2.2% with 1.64 days to cover. Shares are down 7% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Ingredion as a buy. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Net operating cash flow has slightly increased to $250.00 million or 2.04% when compared to the same quarter last year. In addition, INGREDION INC has also modestly surpassed the industry average cash flow growth rate of 0.66%.
  • INGR's debt-to-equity ratio of 0.72 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that INGR's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.86 is high and demonstrates strong liquidity.
  • INGR, with its decline in revenue, slightly underperformed the industry average of 0.2%. Since the same quarter one year prior, revenues slightly dropped by 3.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • INGREDION INC's earnings per share declined by 24.1% 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, INGREDION INC increased its bottom line by earning $5.48 versus $5.32 in the prior year. For the next year, the market is expecting a contraction of 7.8% in earnings ($5.05 versus $5.48).

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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