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Trade-Ideas LLC identified

Conn's

(

CONN

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

  • CONN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.8 million.
  • CONN has traded 111,307 shares today.
  • CONN is up 3.8% today.
  • CONN was down 8.6% yesterday.

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More details on CONN:

Conn's, Inc. operates as a specialty retailer of durable consumer goods and related services in the United States. It operates through Retail and Credit segments. CONN has a PE ratio of 13. Currently there are 2 analysts that rate Conn's a buy, no analysts rate it a sell, and 3 rate it a hold.

TheStreet Recommends

The average volume for Conn's has been 1.0 million shares per day over the past 30 days. Conn's has a market cap of $352.3 million and is part of the services sector and retail industry. The stock has a beta of 2.03 and a short float of 33.3% with 5.59 days to cover. Shares are down 51.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Conn's as a

hold

. Among the primary strengths of the company is its revenue growth. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and generally higher debt management risk.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.5%. Since the same quarter one year prior, revenues slightly increased by 7.3%. 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.
  • CONN'S 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CONN'S INC reported lower earnings of $0.84 versus $1.59 in the prior year. This year, the market expects an improvement in earnings ($1.15 versus $0.84).
  • The debt-to-equity ratio is very high at 2.32 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 6.44, which shows the ability to cover short-term cash needs.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Specialty Retail industry and the overall market, CONN'S INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • 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 93.1% when compared to the same quarter one year ago, falling from $15.46 million to $1.06 million.

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