Trade-Ideas LLC identified

Blackhawk Network Holdings

(

HAWK

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Blackhawk Network Holdings as such a stock due to the following factors:

  • HAWK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $20.9 million.
  • HAWK has traded 130,305 shares today.
  • HAWK is up 3.1% today.
  • HAWK was down 10.2% yesterday.

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More details on HAWK:

Blackhawk Network Holdings, Inc. provides a range of prepaid gift, telecom, and debit cards; and related prepaid products and payment services. HAWK has a PE ratio of 45. Currently there are 7 analysts that rate Blackhawk Network Holdings a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for Blackhawk Network Holdings has been 417,200 shares per day over the past 30 days. Blackhawk Network has a market cap of $2.1 billion and is part of the financial sector and financial services industry. The stock has a beta of 0.07 and a short float of 17.8% with 2.50 days to cover. Shares are down 23.1% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Blackhawk Network Holdings as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 17.9%. Since the same quarter one year prior, revenues rose by 14.8%. 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.
  • The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels.
  • Net operating cash flow has slightly increased to $823.77 million or 9.87% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -19.70%.
  • The gross profit margin for BLACKHAWK NETWORK HLDGS INC is currently very high, coming in at 80.80%. Regardless of HAWK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HAWK's net profit margin of 5.50% is significantly lower than the industry average.
  • BLACKHAWK NETWORK HLDGS INC's earnings per share declined by 5.2% 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 two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, BLACKHAWK NETWORK HLDGS INC reported lower earnings of $0.79 versus $0.81 in the prior year. This year, the market expects an improvement in earnings ($2.63 versus $0.79).

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