Stock To Watch: Kohl's (KSS) In Perilous Reversal

Trade-Ideas LLC identified Kohl's (KSS) as a "perilous reversal" (up big yesterday but down big today) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Kohl's

(

KSS

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Kohl's as such a stock due to the following factors:

  • KSS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $271.5 million.
  • KSS has traded 92,561 shares today.
  • KSS is down 4.6% today.
  • KSS was up 6.1% yesterday.

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More details on KSS:

Kohl's Corporation operates department stores in the United States. It offers private label, exclusive, and national brand apparel, footwear, accessories, beauty, and home products to children, men, and women customers. The stock currently has a dividend yield of 4.2%. KSS has a PE ratio of 11. Currently there are 8 analysts that rate Kohl's a buy, 1 analyst rates it a sell, and 7 rate it a hold.

The average volume for Kohl's has been 3.5 million shares per day over the past 30 days. Kohl's has a market cap of $8.4 billion and is part of the services sector and retail industry. The stock has a beta of 1.49 and a short float of 10% with 3.24 days to cover. Shares are down 25% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Kohl's 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 deteriorating net income, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.4%. Since the same quarter one year prior, revenues slightly increased by 0.6%. 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 0.89, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.29 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • 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 Multiline Retail industry. The net income has significantly decreased by 44.0% when compared to the same quarter one year ago, falling from $232.00 million to $130.00 million.
  • Net operating cash flow has significantly decreased to $251.00 million or 54.44% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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