Barbarian At The Gate: Kohl's (KSS)

Trade-Ideas LLC identified Kohl's (KSS) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Kohl's

(

KSS

) 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 Kohl's as such a stock due to the following factors:

  • KSS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $112.6 million.
  • KSS has traded 2.2 million shares today.
  • KSS traded in a range 206.2% of the normal price range with a price range of $2.26.
  • KSS traded above its daily resistance level (quality: 6 days, meaning that the stock is crossing a resistance level set by the last 6 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 KSS:

Kohl's Corporation operates department stores in the United States. It offers private label, exclusive, and national brand apparel, footwear, accessories, beauty, and home products to children, men, and women customers. The company also sells its products online through Website Kohls.com. The stock currently has a dividend yield of 5.3%. KSS has a PE ratio of 13. Currently there are 7 analysts that rate Kohl's a buy, 3 analysts rate it a sell, and 8 rate it a hold.

The average volume for Kohl's has been 3.6 million shares per day over the past 30 days. Kohl's has a market cap of $7.0 billion and is part of the services sector and retail industry. The stock has a beta of 1.04 and a short float of 9.2% with 5.76 days to cover. Shares are down 22.9% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Kohl's as a

hold

. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • Net operating cash flow has increased to $140.00 million or 37.25% when compared to the same quarter last year. In addition, KOHL'S CORP has also vastly surpassed the industry average cash flow growth rate of -60.23%.
  • The debt-to-equity ratio is somewhat low, currently at 0.89, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.16 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Multiline Retail industry. The net income has significantly decreased by 86.6% when compared to the same quarter one year ago, falling from $127.00 million to $17.00 million.
  • 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 Multiline Retail industry and the overall market, KOHL'S 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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