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 Trex Company ( TREX) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Trex Company as such a stock due to the following factors:
- TREX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $24.5 million.
- TREX has traded 86,062 shares today.
- TREX is down 5.9% today.
- TREX was up 20.7% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in TREX with the Ticky from Trade-Ideas. See the FREE profile for TREX NOW at Trade-Ideas More details on TREX: Trex Company, Inc. manufactures and distributes wood/plastic composite products, and related accessories primarily for the residential and commercial decking and railing applications in the United States. TREX has a PE ratio of 74.3. Currently there are 3 analysts that rate Trex Company a buy, no analysts rate it a sell, and 4 rate it a hold. The average volume for Trex Company has been 183,700 shares per day over the past 30 days. Trex has a market cap of $1.1 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 2.31 and a short float of 6.6% with 3.55 days to cover. Shares are up 3.8% year-to-date as of the close of trading on Monday. 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 Trex Company as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, premium valuation and poor profit margins. Highlights from the ratings report include:
- TREX's revenue growth has slightly outpaced the industry average of 2.9%. Since the same quarter one year prior, revenues slightly increased by 4.6%. 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.
- TREX has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.15, which illustrates the ability to avoid short-term cash problems.
- TREX CO INC's earnings per share declined by 5.8% 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, TREX CO INC turned its bottom line around by earning $0.14 versus -$0.79 in the prior year. This year, the market expects an improvement in earnings ($2.67 versus $0.14).
- The gross profit margin for TREX CO INC is currently extremely low, coming in at 8.18%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -20.65% is significantly below that of the industry average.
- You can view the full Trex Company Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.