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 $22.9 million.
  • FRGI has traded 58,514 shares today.
  • FRGI is down 3.6% today.
  • FRGI was up 5.5% 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 16. Currently there are 4 analysts that rate Fiesta Restaurant Group a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Fiesta Restaurant Group has been 530,200 shares per day over the past 30 days. Fiesta Restaurant Group has a market cap of $622.7 million and is part of the services sector and leisure industry. The stock has a beta of 0.76 and a short float of 9.5% with 1.95 days to cover. Shares are down 27.4% year-to-date as of the close of trading on Wednesday.

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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 deteriorating net income, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.3%. Since the same quarter one year prior, revenues slightly increased by 7.8%. 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.
  • FRGI's debt-to-equity ratio is very low at 0.29 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.36 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • The gross profit margin for FIESTA RESTAURANT GROUP INC is currently lower than what is desirable, coming in at 31.24%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 5.60% trails that of the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Hotels, Restaurants & Leisure industry average. The net income has decreased by 5.8% when compared to the same quarter one year ago, dropping from $10.50 million to $9.90 million.

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