Dillards (DDS) Is Today's Dead Cat Bounce Stock

Trade-Ideas LLC identified Dillards (DDS) as a "dead cat bounce" (down big yesterday but up big today) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Dillards

(

DDS

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Dillards as such a stock due to the following factors:

  • DDS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $80.2 million.
  • DDS has traded 640,777 shares today.
  • DDS is up 3.1% today.
  • DDS was down 6.4% yesterday.

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More details on DDS:

Dillard's, Inc. operates as a fashion apparel, cosmetics, and home furnishing retailer in the United States. The company's stores offer a selection of merchandise, including fashion apparel for women, men, and children; accessories; cosmetics; home furnishings; and other consumer goods. The stock currently has a dividend yield of 0.4%. DDS has a PE ratio of 1. Currently there are no analysts that rate Dillards a buy, 2 analysts rate it a sell, and 2 rate it a hold.

The average volume for Dillards has been 521,500 shares per day over the past 30 days. Dillards has a market cap of $2.7 billion and is part of the services sector and retail industry. The stock has a beta of 1.36 and a short float of 18.5% with 4.11 days to cover. Shares are down 42.1% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Dillards as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.6%. Since the same quarter one year prior, revenues slightly increased by 2.3%. 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 current debt-to-equity ratio, 0.43, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.27 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • Net operating cash flow has declined marginally to -$29.30 million or 4.55% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Multiline Retail industry average, but is greater than that of the S&P 500. The net income has decreased by 13.1% when compared to the same quarter one year ago, dropping from $34.45 million to $29.95 million.

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