Trade-Ideas LLC identified

Chico's FAS

(

CHS

) 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 Chico's FAS as such a stock due to the following factors:

  • CHS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $40.0 million.
  • CHS has traded 515,132 shares today.
  • CHS traded in a range 233.8% of the normal price range with a price range of $1.01.
  • CHS traded above its daily resistance level (quality: 105 days, meaning that the stock is crossing a resistance level set by the last 105 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 CHS:

Chico's FAS, Inc. operates as an omni-channel specialty retailer of women's private branded, casual-to-dressy clothing, intimates, complementary accessories, and other non-clothing items. The stock currently has a dividend yield of 2.9%. Currently there are 7 analysts that rate Chico's FAS a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Chico's FAS has been 2.7 million shares per day over the past 30 days. Chico's FAS has a market cap of $1.5 billion and is part of the services sector and retail industry. The stock has a beta of 0.51 and a short float of 7.3% with 3.58 days to cover. Shares are up 0.3% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Chico's FAS as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:

  • CHS's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • CHICOS FAS 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. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CHICOS FAS INC increased its bottom line by earning $0.42 versus $0.40 in the prior year. This year, the market expects an improvement in earnings ($0.67 versus $0.42).
  • The gross profit margin for CHICOS FAS INC is rather high; currently it is at 59.12%. Regardless of CHS'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 -1.81% trails the industry average.
  • Net operating cash flow has decreased to $17.98 million or 35.68% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Specialty Retail industry and the overall market, CHICOS FAS INC's return on equity significantly trails that of both the industry average and the S&P 500.

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