Trade-Ideas LLC identified Headwaters ( HW) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Headwaters as such a stock due to the following factors:
- HW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $16.5 million.
- HW has traded 50,417 shares today.
- HW is up 3.3% today.
- HW was down 11.4% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in HW with the Ticky from Trade-Ideas. See the FREE profile for HW NOW at Trade-Ideas More details on HW: Headwaters Incorporated, a building materials company, provides products and services to building and construction materials sectors primarily in the United States and Canada. It operates through three segments: Building Products, Construction Materials, and Energy Technology. HW has a PE ratio of 11. Currently there are 6 analysts that rate Headwaters a buy, no analysts rate it a sell, and 2 rate it a hold. The average volume for Headwaters has been 659,600 shares per day over the past 30 days. Headwaters has a market cap of $1.5 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.48 and a short float of 3.9% with 2.68 days to cover. Shares are up 16.3% year-to-date as of the close of trading on Monday. EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE. TheStreetRatings.com Analysis: TheStreet Quant Ratings rates Headwaters as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, notable return on equity, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated. Highlights from the ratings report include:
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Construction Materials industry. The net income increased by 81.7% when compared to the same quarter one year prior, rising from $6.84 million to $12.43 million.
- HW's revenue growth trails the industry average of 21.4%. Since the same quarter one year prior, revenues slightly increased by 9.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- 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 Construction Materials industry and the overall market, HEADWATERS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has significantly increased by 410.14% to $41.57 million when compared to the same quarter last year. In addition, HEADWATERS INC has also vastly surpassed the industry average cash flow growth rate of 67.39%.
- You can view the full Headwaters Ratings Report.
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