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.

Trade-Ideas LLC identified American Airlines Group ( AAL) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified American Airlines Group as such a stock due to the following factors:

  • AAL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $1.2 billion.
  • AAL traded 16,466 shares today in the pre-market hours as of 8:00 AM.
  • AAL is down 2.4% today from yesterday's close.

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More details on AAL:

American Airlines Group Inc., through its subsidiaries, operates in the airline industry. As of December 31, 2014, the company operated 983 mainline jets, as well as 566 regional aircrafts through regional airline subsidiaries and third-party regional carriers. The stock currently has a dividend yield of 0.8%. AAL has a PE ratio of 13.4. Currently there are 10 analysts that rate American Airlines Group a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for American Airlines Group has been 14.5 million shares per day over the past 30 days. American Airlines Group has a market cap of $36.8 billion and is part of the services sector and transportation industry. The stock has a beta of 3.85 and a short float of 2% with 0.56 days to cover. Shares are down 6% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates American Airlines Group as a hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, robust revenue growth and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins.

Highlights from the ratings report include:
  • Compared to other companies in the Airlines industry and the overall market, AMERICAN AIRLINES GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The revenue growth came in higher than the industry average of 22.1%. Since the same quarter one year prior, revenues rose by 38.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has significantly increased by 171.27% to $804.00 million when compared to the same quarter last year. Despite an increase in cash flow of 171.27%, AMERICAN AIRLINES GROUP INC is still growing at a significantly lower rate than the industry average of 1571.91%.
  • The gross profit margin for AMERICAN AIRLINES GROUP INC is currently lower than what is desirable, coming in at 32.26%. Regardless of AAL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, AAL's net profit margin of 5.87% compares favorably to the industry average.
  • The debt-to-equity ratio is very high at 8.86 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, AAL maintains a poor quick ratio of 0.73, which illustrates the inability to avoid short-term cash problems.

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