Armstrong World Industries (AWI) Trading With Heavy Volume Before Market Open

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 Armstrong World Industries ( AWI) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Armstrong World Industries as such a stock due to the following factors:

  • AWI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $97.6 million.
  • AWI traded 252,365 shares today in the pre-market hours as of 8:42 AM, representing 13.1% of its average daily volume.

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More details on AWI:

Armstrong World Industries, Inc. designs, manufactures, and sells flooring products and ceiling systems worldwide. AWI has a PE ratio of 27.1. Currently there are 6 analysts that rate Armstrong World Industries a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Armstrong World Industries has been 971,400 shares per day over the past 30 days. Armstrong World has a market cap of $2.7 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.32 and a short float of 6.9% with 1.73 days to cover. Shares are down 14.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Armstrong World Industries as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels 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:
  • AWI's revenue growth has slightly outpaced the industry average of 4.6%. Since the same quarter one year prior, revenues slightly increased by 0.5%. 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.
  • Despite the current debt-to-equity ratio of 1.51, it is still below the industry average, suggesting that this level of debt is acceptable within the Building Products industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.86 is weak.
  • ARMSTRONG WORLD INDUSTRIES's earnings per share declined by 25.5% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, ARMSTRONG WORLD INDUSTRIES reported lower earnings of $1.70 versus $2.41 in the prior year. This year, the market expects an improvement in earnings ($2.63 versus $1.70).
  • In its most recent trading session, AWI has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.

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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