American Airlines Group (AAL) Leading In Pre-Market Activity

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 American Airlines Group ( AAL) as a pre-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified American Airlines Group as such a stock due to the following factors:

  • AAL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $631.3 million.
  • AAL traded 12,929 shares today in the pre-market hours as of 7:46 AM.
  • AAL is up 3% today from yesterday's close.

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More details on AAL:

American Airlines Group Inc., through its subsidiaries, operates in the airline industry. As of December 31, 2014, the company operated 983 mainline jets, as well as 566 regional aircrafts through regional airline subsidiaries and third-party regional carriers. The stock currently has a dividend yield of 1%. AAL has a PE ratio of 9. Currently there are 8 analysts that rate American Airlines Group a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for American Airlines Group has been 12.6 million shares per day over the past 30 days. American Airlines Group has a market cap of $27.6 billion and is part of the services sector and transportation industry. The stock has a beta of 3.85 and a short float of 4.6% with 1.87 days to cover. Shares are down 25.6% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates American Airlines Group as a hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, notable return on equity and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • AMERICAN AIRLINES GROUP 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. This trend suggests that the performance of the business is improving. During the past fiscal year, AMERICAN AIRLINES GROUP INC turned its bottom line around by earning $3.92 versus -$8.48 in the prior year. This year, the market expects an improvement in earnings ($9.03 versus $3.92).
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Airlines industry and the overall market, AMERICAN AIRLINES GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • AAL, with its decline in revenue, slightly underperformed the industry average of 3.1%. Since the same quarter one year prior, revenues slightly dropped by 1.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • AAL has underperformed the S&P 500 Index, declining 6.29% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The debt-to-equity ratio is very high at 6.85 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, AAL maintains a poor quick ratio of 0.83, which illustrates the inability to avoid short-term cash problems.

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