Today's Dead Cat Bounce Stock: World Acceptance (WRLD)

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

  • WRLD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $21.2 million.
  • WRLD has traded 52,308 shares today.
  • WRLD is up 4.8% today.
  • WRLD was down 5.7% yesterday.

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More details on WRLD:

World Acceptance Corporation is engaged in small-loan consumer finance business in the United States and Mexico. The company primarily offers short-term and medium-term consumer installment loans, as well as related credit insurance, and ancillary products and services to individuals. WRLD has a PE ratio of 7. Currently there is 1 analyst that rates World Acceptance a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for World Acceptance has been 247,800 shares per day over the past 30 days. World Acceptance has a market cap of $767.4 million and is part of the financial sector and financial services industry. The stock has a beta of 0.69 and a short float of 84.5% with 14.13 days to cover. Shares are down 4.5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates World Acceptance as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, notable return on equity, attractive valuation levels, expanding profit margins and impressive record of earnings per share growth. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Consumer Finance industry. The net income increased by 24.5% when compared to the same quarter one year prior, going from $38.98 million to $48.52 million.
  • 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 Consumer Finance industry and the overall market, WORLD ACCEPTANCE CORP/DE's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • 42.35% is the gross profit margin for WORLD ACCEPTANCE CORP/DE which we consider to be strong. Regardless of WRLD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, WRLD's net profit margin of 30.89% significantly outperformed against the industry.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.6%. Since the same quarter one year prior, revenues slightly dropped by 3.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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Strong On High Relative Volume: World Acceptance (WRLD)

Strong On High Relative Volume: World Acceptance (WRLD)

Trade-Ideas: World Acceptance (WRLD) Is Today's Weak On High Relative Volume Stock

Trade-Ideas: World Acceptance (WRLD) Is Today's Weak On High Relative Volume Stock