Barbarian At The Gate: Cabela's (CAB)
Trade-Ideas LLC identified
(
) 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 Cabela's as such a stock due to the following factors:
- CAB has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $54.8 million.
- CAB has traded 230,744 shares today.
- CAB traded in a range 213.1% of the normal price range with a price range of $3.19.
- CAB traded above its daily resistance level (quality: 55 days, meaning that the stock is crossing a resistance level set by the last 55 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.
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More details on CAB:
Cabela's Incorporated, together with its subsidiaries, operates as a specialty retailer and direct marketer of hunting, fishing, camping, and related outdoor merchandise. The company operates through three segments: Retail, Direct, and Financial Services. CAB has a PE ratio of 16. Currently there are 4 analysts that rate Cabela's a buy, 1 analyst rates it a sell, and 10 rate it a hold.
The average volume for Cabela's has been 1.7 million shares per day over the past 30 days. Cabela's has a market cap of $2.9 billion and is part of the services sector and specialty retail industry. The stock has a beta of 0.23 and a short float of 20.1% with 8.77 days to cover. Shares are down 20.8% year-to-date as of the close of trading on Thursday.
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Analysis:
rates Cabela's as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and generally higher debt management risk.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.6%. Since the same quarter one year prior, revenues slightly increased by 4.6%. 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.
- 44.47% is the gross profit margin for CABELAS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 4.71% trails the industry average.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Specialty Retail industry and the overall market, CABELAS INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Specialty Retail industry average. The net income has decreased by 18.8% when compared to the same quarter one year ago, dropping from $53.84 million to $43.71 million.
- You can view the full Cabela's Ratings Report.
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