Trade-Ideas: Ann (ANN) Is Today's "Barbarian At The Gate" 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 "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Ann as such a stock due to the following factors:
- ANN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $29.8 million.
- ANN has traded 214,885 shares today.
- ANN traded in a range 208.3% of the normal price range with a price range of $2.05.
- ANN traded above its daily resistance level (quality: 11 days, meaning that the stock is crossing a resistance level set by the last 11 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.
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More details on ANN:
ANN INC., through its subsidiaries, engages in the retailing of women's apparel, shoes, and accessories under the Ann Taylor and LOFT brands. ANN has a PE ratio of 22.9. Currently there are 6 analysts that rate Ann a buy, no analysts rate it a sell, and 10 rate it a hold.
The average volume for Ann has been 635,000 shares per day over the past 30 days. Ann has a market cap of $1.6 billion and is part of the services sector and retail industry. The stock has a beta of 1.06 and a short float of 4.7% with 2.61 days to cover. Shares are down 3.6% year-to-date as of the close of trading on Tuesday.
Analysis:
rates Ann as a
. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- The gross profit margin for ANN INC is rather high; currently it is at 56.76%. Regardless of ANN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.61% trails the industry average.
- ANN, with its decline in revenue, underperformed when compared the industry average of 13.5%. Since the same quarter one year prior, revenues slightly dropped by 1.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- ANN INC's earnings per share declined by 27.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ANN INC increased its bottom line by earning $2.19 versus $2.10 in the prior year. For the next year, the market is expecting a contraction of 21.5% in earnings ($1.72 versus $2.19).
- 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 Specialty Retail industry. The net income has significantly decreased by 27.5% when compared to the same quarter one year ago, falling from $41.19 million to $29.86 million.
- You can view the full Ann Ratings Report.
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