ARRIS Group (ARRS) Highlighted As Today's Perilous Reversal 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 ARRIS Group ( ARRS) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified ARRIS Group as such a stock due to the following factors:

  • ARRS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $80.9 million.
  • ARRS has traded 444,073 shares today.
  • ARRS is down 3.3% today.
  • ARRS was up 12.2% yesterday.

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More details on ARRS:

Arris Enterprises, Inc. develops, manufactures, and supplies telephony, data, video, construction, rebuild, and maintenance equipment primarily for cable system operators in the broadband communications industry worldwide. Currently there are 5 analysts that rate ARRIS Group a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for ARRIS Group has been 2.1 million shares per day over the past 30 days. ARRIS Group has a market cap of $3.9 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 0.64 and a short float of 4.7% with 2.21 days to cover. Shares are up 14.8% 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 ARRIS Group as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, solid stock price performance and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • ARRS's very impressive revenue growth greatly exceeded the industry average of 3.6%. Since the same quarter one year prior, revenues leaped by 198.7%. 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.
  • Compared to its closing price of one year ago, ARRS's share price has jumped by 64.48%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ARRS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has significantly increased by 434.55% to $36.04 million when compared to the same quarter last year. In addition, ARRIS GROUP INC has also vastly surpassed the industry average cash flow growth rate of 19.40%.
  • ARRIS GROUP INC's earnings per share declined by 13.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ARRIS GROUP INC turned its bottom line around by earning $0.46 versus -$0.18 in the prior year. This year, the market expects an improvement in earnings ($1.56 versus $0.46).
  • The net income growth from the same quarter one year ago has exceeded that of the Communications Equipment industry average, but is less than that of the S&P 500. The net income increased by 0.5% when compared to the same quarter one year prior, going from $17.86 million to $17.96 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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