Panera Bread (PNRA) Flagged As A Storm The Castle Stock

Trade-Ideas LLC identified Panera Bread (PNRA) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Panera Bread

(

PNRA

) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Panera Bread as such a stock due to the following factors:

  • PNRA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $81.7 million.
  • PNRA has traded 518,732 shares today.
  • PNRA is trading at 2.37 times the normal volume for the stock at this time of day.
  • PNRA crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on PNRA:

Panera Bread Company owns, operates, and franchises retail bakery-cafes in the United States and Canada. The company operates through three segments: Bakery-Cafe Operations, Franchise Operations, and Fresh Dough and Other Product Operations. PNRA has a PE ratio of 29. Currently there are 11 analysts that rate Panera Bread a buy, no analysts rate it a sell, and 11 rate it a hold.

The average volume for Panera Bread has been 508,800 shares per day over the past 30 days. Panera Bread has a market cap of $4.1 billion and is part of the services sector and leisure industry. The stock has a beta of 0.18 and a short float of 10.4% with 4.93 days to cover. Shares are up 1.7% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Panera Bread as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:

  • PNRA's revenue growth has slightly outpaced the industry average of 1.3%. Since the same quarter one year prior, revenues slightly increased by 7.2%. 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 debt-to-equity ratio is somewhat low, currently at 0.72, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.99 is somewhat weak and could be cause for future problems.
  • 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. In comparison to other companies in the Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, PANERA BREAD CO has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
  • After a year of stock price fluctuations, the net result is that PNRA's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • PANERA BREAD CO's earnings per share declined by 13.0% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, PANERA BREAD CO reported lower earnings of $6.65 versus $6.82 in the prior year. For the next year, the market is expecting a contraction of 8.0% in earnings ($6.12 versus $6.65).

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