Trade-Ideas LLC identified

Finish Line

(

FINL

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

  • FINL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $48.6 million.
  • FINL has traded 207,836 shares today.
  • FINL is down 3.4% today.
  • FINL was up 21.8% yesterday.

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More details on FINL:

The Finish Line, Inc., together with its subsidiaries, operates as a specialty retailer of athletic shoes, apparel, and accessories in the United States. It operates in two divisions, the Finish Line and JackRabbit. The stock currently has a dividend yield of 2.4%. FINL has a PE ratio of 35. Currently there are 9 analysts that rate Finish Line a buy, no analysts rate it a sell, and 9 rate it a hold.

The average volume for Finish Line has been 1.2 million shares per day over the past 30 days. Finish Line has a market cap of $709.0 million and is part of the services sector and specialty retail industry. The stock has a beta of 1.22 and a short float of 19.2% with 3.02 days to cover. Shares are up 13.2% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Finish Line as a

hold

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

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 6.8%. Since the same quarter one year prior, revenues slightly increased by 5.2%. 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.
  • 35.98% is the gross profit margin for FINISH LINE INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 0.69% trails the industry average.
  • FINL has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Despite the fact that FINL's debt-to-equity ratio is low, the quick ratio, which is currently 0.57, displays a potential problem in covering short-term cash needs.
  • Net operating cash flow has decreased to $77.96 million or 29.19% 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.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 37.43%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 89.65% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.

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