Conn's (CONN) Marked As A Dead Cat Bounce 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
(
) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Conn's as such a stock due to the following factors:
- CONN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $22.4 million.
- CONN has traded 53,970 shares today.
- CONN is up 9.2% today.
- CONN was down 7.7% yesterday.
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More details on CONN:
Conn's, Inc. operates as a specialty retailer of durable consumer goods and related services in Texas, Arizona, Louisiana, Oklahoma, and New Mexico, the United States. CONN has a PE ratio of 13.5. Currently there are 3 analysts that rate Conn's a buy, no analysts rate it a sell, and 4 rate it a hold.
The average volume for Conn's has been 1.4 million shares per day over the past 30 days. Conn's has a market cap of $943.7 million and is part of the services sector and retail industry. The stock has a beta of 2.32 and a short float of 49.1% with 14.82 days to cover. Shares are up 28.4% year-to-date as of the close of trading on Tuesday.
Analysis:
rates Conn's as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.
Highlights from the ratings report include:
- CONN's revenue growth has slightly outpaced the industry average of 14.2%. Since the same quarter one year prior, revenues rose by 19.0%. 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.
- The gross profit margin for CONN'S INC is rather high; currently it is at 52.43%. 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 -0.82% 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, CONN'S 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 significantly underperformed when compared to that of the S&P 500 and the Specialty Retail industry. The net income has significantly decreased by 112.6% when compared to the same quarter one year ago, falling from $24.38 million to -$3.06 million.
- You can view the full Conn's Ratings Report.
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