Mohawk Industries (MHK) Hits New Lifetime High Today

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 Mohawk Industries ( MHK) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Mohawk Industries as such a stock due to the following factors:

  • MHK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $129.0 million.
  • MHK has traded 2,185 shares today.
  • MHK is trading at a new lifetime high.

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More details on MHK:

Mohawk Industries, Inc. designs, manufactures, sources, distributes, and markets flooring products for residential and commercial applications for remodeling and new constructions worldwide. It operates in three segments: Carpet, Ceramic, and Laminate and Wood. MHK has a PE ratio of 28. Currently there are 8 analysts that rate Mohawk Industries a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Mohawk Industries has been 672,200 shares per day over the past 30 days. Mohawk has a market cap of $13.4 billion and is part of the consumer goods sector and consumer durables industry. The stock has a beta of 1.08 and a short float of 2.9% with 1.98 days to cover. Shares are up 19.6% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Mohawk Industries as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 5.9%. Since the same quarter one year prior, revenues slightly increased by 3.8%. 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.
  • Net operating cash flow has increased to -$49.65 million or 30.08% when compared to the same quarter last year. In addition, MOHAWK INDUSTRIES INC has also vastly surpassed the industry average cash flow growth rate of -486.42%.
  • Compared to its closing price of one year ago, MHK's share price has jumped by 35.64%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • MOHAWK INDUSTRIES INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MOHAWK INDUSTRIES INC increased its bottom line by earning $7.25 versus $5.05 in the prior year. This year, the market expects an improvement in earnings ($9.74 versus $7.25).
  • The current debt-to-equity ratio, 0.58, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.44 is very weak and demonstrates a lack of ability to pay short-term obligations.

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