Matson (MATX) Is Today's Perilous Reversal 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 Matson ( MATX) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Matson as such a stock due to the following factors:

  • MATX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.5 million.
  • MATX has traded 149,980 shares today.
  • MATX is down 3% today.
  • MATX was up 20.5% yesterday.

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More details on MATX:

Matson, Inc., together with its subsidiaries, operates as an ocean freight carrier in the Pacific. It operates in two segments, Ocean Transportation and Logistics. The stock currently has a dividend yield of 2.3%. MATX has a PE ratio of 25.0. Currently there are 3 analysts that rate Matson a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Matson has been 186,600 shares per day over the past 30 days. Matson has a market cap of $1.3 billion and is part of the services sector and transportation industry. The stock has a beta of 0.96 and a short float of 4% with 3.41 days to cover. Shares are up 34.9% year-to-date as of the close of trading on Wednesday.

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 Matson as a buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, revenue growth and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • MATSON INC has improved earnings per share by 25.0% 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, MATSON INC increased its bottom line by earning $1.25 versus $1.23 in the prior year. This year, the market expects an improvement in earnings ($1.33 versus $1.25).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Marine industry average. The net income increased by 25.0% when compared to the same quarter one year prior, going from $17.20 million to $21.50 million.
  • MATX's revenue growth trails the industry average of 23.1%. Since the same quarter one year prior, revenues slightly increased by 6.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • In its most recent trading session, MATX 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. 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.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Marine industry and the overall market on the basis of return on equity, MATSON INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

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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