Trade-Ideas LLC identified

Iconix Brand Group

(

ICON

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

  • ICON has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.0 million.
  • ICON has traded 183,967 shares today.
  • ICON is down 3.3% today.
  • ICON was up 7% yesterday.

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More details on ICON:

Iconix Brand Group, Inc., a brand management company, owns, licenses, and markets a portfolio of consumer brands across women's, men's, entertainment, and home primarily in the United States and internationally. ICON has a PE ratio of 6. Currently there are 2 analysts that rate Iconix Brand Group a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Iconix Brand Group has been 1.3 million shares per day over the past 30 days. Iconix Brand Group has a market cap of $710.9 million and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 2.04 and a short float of 24.1% with 10.36 days to cover. Shares are down 53.6% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Iconix Brand 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, generally higher debt management risk and disappointing return on equity.

Highlights from the ratings report include:

  • ICON's revenue growth trails the industry average of 14.5%. Since the same quarter one year prior, revenues slightly increased by 0.9%. 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 gross profit margin for ICONIX BRAND GROUP INC is currently very high, coming in at 100.00%. ICON has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, ICON's net profit margin of 14.99% compares favorably to the industry average.
  • 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 Textiles, Apparel & Luxury Goods industry. The net income has significantly decreased by 58.2% when compared to the same quarter one year ago, falling from $35.32 million to $14.77 million.
  • Currently the debt-to-equity ratio of 1.53 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, ICON maintains a poor quick ratio of 0.78, which illustrates the inability to avoid short-term cash problems.

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