Trade-Ideas: Eagle Materials (EXP) Is Today's Post-Market Laggard 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 Eagle Materials ( EXP) as a post-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Eagle Materials as such a stock due to the following factors:

  • EXP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $55.7 million.
  • EXP is down 3.6% today from today's close.

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More details on EXP:

Eagle Materials Inc. manufactures and distributes building products used in residential, industrial, commercial, and infrastructure construction in the United States. The company operates in four segments: Cement, Gypsum Wallboard, Recycled Paperboard, and Concrete and Aggregates. The stock currently has a dividend yield of 0.5%. EXP has a PE ratio of 26. Currently there are 3 analysts that rate Eagle Materials a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Eagle Materials has been 693,800 shares per day over the past 30 days. Eagle has a market cap of $4.3 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.42 and a short float of 3.3% with 2.06 days to cover. Shares are up 11.9% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Eagle Materials as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, notable return on equity, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 21.8%. Since the same quarter one year prior, revenues rose by 27.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • EAGLE MATERIALS INC 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, EAGLE MATERIALS INC increased its bottom line by earning $2.48 versus $1.24 in the prior year. This year, the market expects an improvement in earnings ($3.50 versus $2.48).
  • 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. In comparison to the other companies in the Construction Materials industry and the overall market, EAGLE MATERIALS INC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • Net operating cash flow has slightly increased to $65.49 million or 1.13% when compared to the same quarter last year. Despite an increase in cash flow of 1.13%, EAGLE MATERIALS INC is still growing at a significantly lower rate than the industry average of 103.48%.
  • The current debt-to-equity ratio, 0.53, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.87 is somewhat weak and could be cause for future problems.

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