MasTec (MTZ) Is Today's 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.

Trade-Ideas LLC identified MasTec ( MTZ) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified MasTec as such a stock due to the following factors:

  • MTZ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $22.3 million.
  • MTZ has traded 1.3 million shares today.
  • MTZ is up 3.1% today.
  • MTZ was down 12.2% yesterday.

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More details on MTZ:

MasTec, Inc., an infrastructure construction company, provides engineering, building, installation, maintenance, and upgrade services for energy, utility, and communications infrastructure primarily in the United States. MTZ has a PE ratio of 12. Currently there are 8 analysts that rate MasTec a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for MasTec has been 1.0 million shares per day over the past 30 days. MasTec has a market cap of $1.5 billion and is part of the industrial goods sector and materials & construction industry. Shares are down 18.4% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates MasTec as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:
  • MTZ's revenue growth has slightly outpaced the industry average of 4.8%. Since the same quarter one year prior, revenues slightly increased by 4.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The debt-to-equity ratio of 1.04 is relatively high when compared with the industry average, suggesting a need for better debt level management.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Construction & Engineering industry and the overall market, MASTEC INC's return on equity is below that of both the industry average and the S&P 500.

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