Barbarian At The Gate: Fossil Group (FOSL)
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 Fossil Group (FOSL) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Fossil Group as such a stock due to the following factors:
- FOSL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $90.4 million.
- FOSL has traded 695,921 shares today.
- FOSL traded in a range 229.1% of the normal price range with a price range of $5.51.
- FOSL traded above its daily resistance level (quality: 10 days, meaning that the stock is crossing a resistance level set by the last 10 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.EXCLUSIVE OFFER: Get the inside scoop on opportunities in FOSL with the Ticky from Trade-Ideas. See the FREE profile for FOSL NOW at Trade-IdeasMore details on FOSL: Fossil Group, Inc., together with its subsidiaries, is engaged in the design, development, marketing, and distribution of consumer fashion accessories worldwide. It operates in four segments: North America Wholesale, Europe Wholesale, Asia Pacific Wholesale, and Direct to Consumer. Currently there are 5 analysts that rate Fossil Group a buy, 3 analysts rate it a sell, and 6 rate it a hold.The average volume for Fossil Group has been 1.1 million shares per day over the past 30 days. Fossil Group has a market cap of $6.3 billion and is part of the consumer goods sector and consumer durables industry. The stock has a beta of 2.45 and a short float of 12.4% with 5.24 days to cover.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 Fossil Group as a buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth, notable return on equity, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.Highlights from the ratings report include:
- FOSSIL GROUP INC has improved earnings per share by 6.8% 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. During the past fiscal year, FOSSIL GROUP INC increased its bottom line by earning $6.62 versus $5.62 in the prior year. This year, the market expects an improvement in earnings ($7.24 versus $6.62).
- Despite its growing revenue, the company underperformed as compared with the industry average of 15.9%. Since the same quarter one year prior, revenues rose by 12.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, FOSSIL GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for FOSSIL GROUP INC is rather high; currently it is at 59.44%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 13.97% is above that of the industry average.
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. 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.
- You can view the full Fossil Group 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.
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