Ralph Lauren (RL) Is Today's Roof Leaker Stock
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 or Stephanie Link.Trade-Ideas LLC identified Ralph Lauren (RL) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Ralph Lauren as such a stock due to the following factors:
- RL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $179.8 million.
- RL has traded 2.1 million shares today.
- RL is trading at 3.23 times the normal volume for the stock at this time of day.
- RL crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.EXCLUSIVE OFFER: Get the inside scoop on opportunities in RL with the Ticky from Trade-Ideas. See the FREE profile for RL NOW at Trade-IdeasMore details on RL: Ralph Lauren Corporation engages in the design, marketing, and distribution of lifestyle products. The stock currently has a dividend yield of 0.9%. RL has a PE ratio of 21.6. Currently there are 7 analysts that rate Ralph Lauren a buy, no analysts rate it a sell, and 6 rate it a hold.The average volume for Ralph Lauren has been 807,700 shares per day over the past 30 days. The stock has a beta of 1.21 and a short float of 1.9% with 0.97 days to cover. Shares are up 14.2% year to date as of the close of trading on Wednesday.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.TheStreetRatings.com Analysis:TheStreet Quant Ratings rates Ralph Lauren as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, increase in stock price during the past year, good cash flow from operations and expanding profit margins. We feel these 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 6.7%. Since the same quarter one year prior, revenues slightly increased by 3.7%. 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.
- RALPH LAUREN CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, RALPH LAUREN CORP increased its bottom line by earning $8.00 versus $7.13 in the prior year. This year, the market expects an improvement in earnings ($8.70 versus $8.00).
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- Net operating cash flow has slightly increased to $295.00 million or 9.78% when compared to the same quarter last year. Despite an increase in cash flow, RALPH LAUREN CORP's average is still marginally south of the industry average growth rate of 17.24%.
- You can view the full Ralph Lauren Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV