Trade-Ideas: Children's Place (PLCE) Is Today's "Perilous Reversal" 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 "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Children's Place as such a stock due to the following factors:
- PLCE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $34.4 million.
- PLCE has traded 86,643 shares today.
- PLCE is down 3.1% today.
- PLCE was up 8.8% yesterday.
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More details on PLCE:
The Children's Place, Inc. operates as a children's specialty apparel retailer in North America. It sells apparel, accessories, and footwear for children; and designs, contracts, manufactures, and sells merchandise under the Place, The Children's Place, and Baby Place brands. The stock currently has a dividend yield of 0.9%. PLCE has a PE ratio of 23.1. Currently there are 5 analysts that rate Children's Place a buy, no analysts rate it a sell, and 7 rate it a hold.
The average volume for Children's Place has been 454,300 shares per day over the past 30 days. Children's Place has a market cap of $1.2 billion and is part of the services sector and retail industry. The stock has a beta of 0.85 and a short float of 21.1% with 6.31 days to cover. Shares are up 10.5% year-to-date as of the close of trading on Thursday.
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Analysis:
rates Children's Place as a
. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- Net operating cash flow has significantly increased by 55.93% to $54.61 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 9.17%.
- PLCE's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.80 is somewhat weak and could be cause for future problems.
- 39.01% is the gross profit margin for CHILDRENS PLACE INC which we consider to be strong. Regardless of PLCE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PLCE's net profit margin of 7.58% compares favorably to the industry average.
- CHILDRENS PLACE INC's earnings per share declined by 7.6% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, CHILDRENS PLACE INC reported lower earnings of $2.31 versus $2.60 in the prior year. This year, the market expects an improvement in earnings ($3.05 versus $2.31).
- You can view the full Children's Place Ratings Report.
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