Trade-Ideas LLC identified

Fiesta Restaurant Group

(

FRGI

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Fiesta Restaurant Group as such a stock due to the following factors:

  • FRGI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $18.2 million.
  • FRGI has traded 70,708 shares today.
  • FRGI is down 3.7% today.
  • FRGI was up 5.4% yesterday.

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More details on FRGI:

Fiesta Restaurant Group, Inc., through its subsidiaries, owns, operates, and franchises fast-casual restaurants. It operates its fast-casual restaurants under the Pollo Tropical and Taco Cabana brand names. FRGI has a PE ratio of 24. Currently there are 6 analysts that rate Fiesta Restaurant Group a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Recommends

The average volume for Fiesta Restaurant Group has been 444,800 shares per day over the past 30 days. Fiesta Restaurant Group has a market cap of $939.3 million and is part of the services sector and leisure industry. The stock has a beta of 1.13 and a short float of 17.6% with 8.08 days to cover. Shares are up 9.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Fiesta Restaurant Group as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and poor profit margins.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.9%. Since the same quarter one year prior, revenues rose by 10.8%. 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, 0.30, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.31 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • Looking at the price performance of FRGI's shares over the past 12 months, there is not much good news to report: the stock is down 44.20%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, FRGI is still more expensive than most of the other companies in its industry.
  • The gross profit margin for FIESTA RESTAURANT GROUP INC is currently lower than what is desirable, coming in at 29.05%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 4.61% significantly trails the industry average.

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