Trade-Ideas: American Vanguard (AVD) Is Today's Strong And Under The Radar Stock

Trade-Ideas LLC identified American Vanguard ( AVD) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified American Vanguard as such a stock due to the following factors:

  • AVD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.2 million.
  • AVD has traded 72.716399999999993042365531437098979949951171875 options contracts today.
  • AVD is making at least a new 3-day high.
  • AVD has a PE ratio of 66.
  • AVD is mentioned 1.19 times per day on StockTwits.
  • AVD has not yet been mentioned on StockTwits today.
  • AVD is currently in the upper 20% of its 1-year range.
  • AVD is in the upper 35% of its 20-day range.
  • AVD is in the upper 45% of its 5-day range.
  • AVD is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on AVD:

American Vanguard Corporation, through its subsidiaries, develops, manufactures, and markets specialty chemicals for agricultural, commercial, and consumer uses in the United States and internationally. AVD has a PE ratio of 66. Currently there are 3 analysts that rate American Vanguard a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for American Vanguard has been 205,600 shares per day over the past 30 days. American Vanguard has a market cap of $442.3 million and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.42 and a short float of 7.5% with 9.41 days to cover. Shares are up 8.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates American Vanguard as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 11.1%. Since the same quarter one year prior, revenues slightly increased by 8.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • AVD's debt-to-equity ratio is very low at 0.25 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.06, which illustrates the ability to avoid short-term cash problems.
  • Powered by its strong earnings growth of 66.66% and other important driving factors, this stock has surged by 30.19% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • 41.74% is the gross profit margin for AMERICAN VANGUARD CORP which we consider to be strong. Regardless of AVD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.56% trails the industry average.
  • 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 Chemicals industry and the overall market, AMERICAN VANGUARD CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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