GNC Holdings (GNC) 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 GNC Holdings as such a stock due to the following factors:
- GNC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $58.9 million.
- GNC has traded 185,682 shares today.
- GNC is up 3.1% today.
- GNC was down 8.5% yesterday.
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More details on GNC:
GNC Holdings, Inc. operates as a specialty retailer of health and wellness products. The company operates through three segments: Retail, Franchise, and Manufacturing/Wholesale. The stock currently has a dividend yield of 1.5%. GNC has a PE ratio of 17.4. Currently there are 3 analysts that rate GNC Holdings a buy, no analysts rate it a sell, and 7 rate it a hold.
The average volume for GNC Holdings has been 1.3 million shares per day over the past 30 days. GNC has a market cap of $4.3 billion and is part of the services sector and retail industry. The stock has a beta of 1.15 and a short float of 3.2% with 2.27 days to cover. Shares are up 4.4% year-to-date as of the close of trading on Tuesday.
Analysis:
rates GNC Holdings as a
. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, notable return on equity, good cash flow from operations, expanding profit margins and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- GNC HOLDINGS INC has improved earnings per share by 16.0% 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, GNC HOLDINGS INC increased its bottom line by earning $2.81 versus $2.72 in the prior year. This year, the market expects an improvement in earnings ($3.15 versus $2.81).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Specialty Retail industry and the overall market, GNC HOLDINGS INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- Net operating cash flow has significantly increased by 189.48% to $65.77 million when compared to the same quarter last year. In addition, GNC HOLDINGS INC has also vastly surpassed the industry average cash flow growth rate of 9.17%.
- 38.72% is the gross profit margin for GNC HOLDINGS INC which we consider to be strong. Regardless of GNC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GNC's net profit margin of 8.52% compares favorably to the industry average.
- GNC, with its decline in revenue, underperformed when compared the industry average of 14.2%. Since the same quarter one year prior, revenues slightly dropped by 0.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full GNC Holdings Ratings Report.
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