New Lifetime High Reached: A O Smith (AOS)

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 A O Smith ( AOS) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified A O Smith as such a stock due to the following factors:

  • AOS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $47.0 million.
  • AOS has traded 251,931 shares today.
  • AOS is trading at a new lifetime high.

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More details on AOS:

A. O. Smith Corporation manufactures and markets water heaters and boilers to the residential and commercial end markets primarily in the United States, Canada, China, Europe, India, and the Middle East. It operates in two segments, North America and Rest of World. The stock currently has a dividend yield of 1.2%. AOS has a PE ratio of 37.3. Currently there are 6 analysts that rate A O Smith a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for A O Smith has been 497,300 shares per day over the past 30 days. A O Smith has a market cap of $5.4 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.31 and a short float of 1.4% with 1.56 days to cover. Shares are up 16.5% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates A O Smith 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, notable return on equity, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 1.2%. Since the same quarter one year prior, revenues rose by 12.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • AOS's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, AOS has a quick ratio of 1.80, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Building Products industry and the overall market, SMITH (A O) CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • 39.58% is the gross profit margin for SMITH (A O) CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 9.44% is above that of the industry average.
  • Powered by its strong earnings growth of 27.45% and other important driving factors, this stock has surged by 36.65% 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, AOS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.

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