Perilous Reversal Stock: ArcBest (ARCB)

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

  • ARCB has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.9 million.
  • ARCB has traded 112,024 shares today.
  • ARCB is down 3.6% today.
  • ARCB was up 6.5% yesterday.

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More details on ARCB:

ArcBest Corporation provides freight transportation services and integrated logistics solutions worldwide. The stock currently has a dividend yield of 0.4%. ARCB has a PE ratio of 23.3. Currently there are 2 analysts that rate ArcBest a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for ArcBest has been 260,700 shares per day over the past 30 days. ArcBest has a market cap of $824.8 million and is part of the services sector and transportation industry. The stock has a beta of 1.50 and a short float of 5.6% with 2.28 days to cover. Shares are up 0.4% year-to-date as of the close of trading on Friday.

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 ArcBest as a buy. 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, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • ARCB's revenue growth has slightly outpaced the industry average of 10.4%. Since the same quarter one year prior, revenues rose by 14.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ARCB's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.12, which illustrates the ability to avoid short-term cash problems.
  • ARCBEST CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ARCBEST CORP turned its bottom line around by earning $0.56 versus -$0.34 in the prior year. This year, the market expects an improvement in earnings ($2.02 versus $0.56).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Road & Rail industry. The net income increased by 252.8% when compared to the same quarter one year prior, rising from $4.88 million to $17.21 million.
  • Net operating cash flow has significantly increased by 82.73% to $51.43 million when compared to the same quarter last year. In addition, ARCBEST CORP has also vastly surpassed the industry average cash flow growth rate of -0.86%.

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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