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 Timken (TKR) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Timken as such a stock due to the following factors:
- TKR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $60.2 million.
- TKR has traded 1.1 million shares today.
- TKR is up 3% today.
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More details on TKR:
The Timken Company engineers, manufactures, and markets mechanical components, bearings, and engineered steel bars and tubes worldwide. It operates through four segments: Mobile Industries, Process Industries, Aerospace, and Steel. The stock currently has a dividend yield of 1.5%. TKR has a PE ratio of 26.1. Currently there are 4 analysts that rate Timken a buy, no analysts rate it a sell, and 2 rate it a hold.
The average volume for Timken has been 764,100 shares per day over the past 30 days. Timken has a market cap of $6.2 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.70 and a short float of 2% with 1.78 days to cover. Shares are down 12.5% year-to-date as of the close of trading on Tuesday.
TheStreet Quant Ratings rates Timken as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year, good cash flow from operations, growth in earnings per share 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:
- TKR's revenue growth has slightly outpaced the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 1.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- Net operating cash flow has significantly increased by 211.97% to $40.20 million when compared to the same quarter last year. In addition, TIMKEN CO has also vastly surpassed the industry average cash flow growth rate of -3.88%.
- TIMKEN CO has improved earnings per share by 16.9% 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, TIMKEN CO reported lower earnings of $2.72 versus $5.05 in the prior year. This year, the market expects an improvement in earnings ($3.83 versus $2.72).
- The net income growth from the same quarter one year ago has exceeded that of the Machinery industry average, but is less than that of the S&P 500. The net income increased by 11.2% when compared to the same quarter one year prior, going from $75.10 million to $83.50 million.
- You can view the full Timken Ratings Report.