Sally Beauty Holdings (SBH) Is Water-Logged And Getting Wetter Today
Trade-Ideas LLC identified
(
) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Sally Beauty Holdings as such a stock due to the following factors:
- SBH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $37.8 million.
- SBH has traded 827,166 shares today.
- SBH traded in a range 235.6% of the normal price range with a price range of $1.37.
- SBH traded below 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 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.
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More details on SBH:
Sally Beauty Holdings, Inc., together with its subsidiaries, operates as a specialty retailer and distributor of professional beauty supplies primarily in North America, South America, and Europe. The company operates through two segments, Sally Beauty Supply and Beauty Systems Group. SBH has a PE ratio of 21. Currently there are 6 analysts that rate Sally Beauty Holdings a buy, no analysts rate it a sell, and 7 rate it a hold.
The average volume for Sally Beauty Holdings has been 1.6 million shares per day over the past 30 days. Sally Beauty has a market cap of $4.4 billion and is part of the services sector and specialty retail industry. The stock has a beta of 0.65 and a short float of 5% with 5.47 days to cover. Shares are up 8.9% year-to-date as of the close of trading on Wednesday.
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Analysis:
rates Sally Beauty Holdings as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and deteriorating net income.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 7.4%. Since the same quarter one year prior, revenues slightly increased by 4.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Net operating cash flow has increased to $143.08 million or 21.85% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -2.49%.
- SALLY BEAUTY HOLDINGS INC has improved earnings per share by 5.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SALLY BEAUTY HOLDINGS INC reported lower earnings of $1.49 versus $1.51 in the prior year. This year, the market expects an improvement in earnings ($1.74 versus $1.49).
- The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Specialty Retail industry average. The net income has decreased by 2.2% when compared to the same quarter one year ago, dropping from $61.54 million to $60.16 million.
- SBH has underperformed the S&P 500 Index, declining 9.06% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- You can view the full Sally Beauty Holdings Ratings Report.
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