REX American Resources (REX) Marked As A Dead Cat Bounce 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 REX American Resources ( REX) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified REX American Resources as such a stock due to the following factors:

  • REX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $19.4 million.
  • REX has traded 120,068 shares today.
  • REX is up 3.2% today.
  • REX was down 10% yesterday.

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More details on REX:

REX American Resources Corporation, through its subsidiaries, produces and sells ethanol. The company operates in two segments, Alternative Energy and Real Estate. REX has a PE ratio of 15.9. Currently there are no analysts that rate REX American Resources a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for REX American Resources has been 152,600 shares per day over the past 30 days. REX American has a market cap of $837.3 million and is part of the conglomerates sector and conglomerates industry. The stock has a beta of 1.88 and a short float of 4.5% with 1.21 days to cover. Shares are up 105.9% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates REX American Resources as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • Powered by its strong earnings growth of 582.05% and other important driving factors, this stock has surged by 191.04% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, REX should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • REX AMERICAN RESOURCES 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, REX AMERICAN RESOURCES CORP turned its bottom line around by earning $4.14 versus -$0.35 in the prior year. This year, the market expects an improvement in earnings ($8.51 versus $4.14).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 520.0% when compared to the same quarter one year prior, rising from $3.51 million to $21.74 million.
  • REX's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 4.65, which clearly demonstrates the ability to cover short-term cash needs.

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