Today's Dead Cat Bounce Stock Is El Pollo Loco Holdings (LOCO)
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 El Pollo Loco Holdings as such a stock due to the following factors:
- LOCO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.4 million.
- LOCO has traded 107,339 shares today.
- LOCO is up 3.4% today.
- LOCO was down 11.5% yesterday.
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More details on LOCO:
El Pollo Loco Holdings, Inc., through its subsidiary, El Pollo Loco, Inc., develops, franchises, licenses, and operates quick-service restaurants under the El Pollo Loco name in the United States. LOCO has a PE ratio of 1. Currently there are 5 analysts that rate El Pollo Loco Holdings a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for El Pollo Loco Holdings has been 871,900 shares per day over the past 30 days. El Pollo Loco has a market cap of $440.8 million and is part of the services sector and leisure industry. Shares are down 48.9% year-to-date as of the close of trading on Friday.
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Analysis:
rates El Pollo Loco Holdings as a
. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, poor profit margins and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- EL POLLO LOCO HOLDINGS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. For the next year, the market is expecting a contraction of 29.2% in earnings ($0.68 versus $0.96).
- 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 Hotels, Restaurants & Leisure industry. The net income has significantly decreased by 81.9% when compared to the same quarter one year ago, falling from $25.85 million to $4.67 million.
- The gross profit margin for EL POLLO LOCO HOLDINGS INC is currently lower than what is desirable, coming in at 25.37%. Regardless of LOCO's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, LOCO's net profit margin of 5.25% is significantly lower than the industry average.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 67.55%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 82.08% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- In comparison to the other companies in the Hotels, Restaurants & Leisure industry and the overall market, EL POLLO LOCO HOLDINGS INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full El Pollo Loco Holdings Ratings Report.
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