Trade-Ideas: Sally Beauty Holdings (SBH) Is Today's Strong On High Relative Volume Stock
Trade-Ideas LLC identified
(
) as a strong on high relative volume 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 $77.4 million.
- SBH has traded 783,600 shares today.
- SBH is trading at 13.46 times the normal volume for the stock at this time of day.
- SBH is trading at a new high 5.03% above yesterday's close.
'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.
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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 (BSG). SBH has a PE ratio of 16. Currently there are 6 analysts that rate Sally Beauty Holdings a buy, 1 analyst rates it a sell, and 6 rate it a hold.
The average volume for Sally Beauty Holdings has been 2.3 million shares per day over the past 30 days. Sally Beauty has a market cap of $3.7 billion and is part of the services sector and specialty retail industry. The stock has a beta of 1.06 and a short float of 4.5% with 2.06 days to cover. Shares are down 22.4% year-to-date as of the close of trading on Monday.
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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 and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.6%. Since the same quarter one year prior, revenues slightly increased by 2.1%. 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.
- 49.29% is the gross profit margin for SALLY BEAUTY HOLDINGS INC which we consider to be strong. Regardless of SBH'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 5.82% trails the industry average.
- SALLY BEAUTY HOLDINGS INC's earnings per share declined by 7.7% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse 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 ($1.69 versus $1.49).
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, SBH has underperformed the S&P 500 Index, declining 16.93% 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.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Specialty Retail industry average, but is greater than that of the S&P 500. The net income has decreased by 9.0% when compared to the same quarter one year ago, dropping from $61.75 million to $56.18 million.
- You can view the full Sally Beauty Holdings Ratings Report.
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