Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Men's Wearhouse as such a stock due to the following factors:
- MW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $34.5 million.
- MW has traded 557,924 shares today.
- MW traded in a range 205.7% of the normal price range with a price range of $2.03.
- MW traded below its daily resistance level (quality: 28 days, meaning that the stock is crossing a resistance level set by the last 28 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.
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More details on MW:
The Men's Wearhouse, Inc., together with its subsidiaries, operates as a specialty apparel retailer in the United States and Canada. The company operates through two segments, Retail and Corporate Apparel. The stock currently has a dividend yield of 1.2%. MW has a PE ratio of 41.9. Currently there are 3 analysts that rate Men's Wearhouse a buy, no analysts rate it a sell, and none rate it a hold.
The average volume for Men's Wearhouse has been 641,700 shares per day over the past 30 days. Men's Wearhouse has a market cap of $2.8 billion and is part of the services sector and retail industry. The stock has a beta of 1.56 and a short float of 6.5% with 4.59 days to cover. Shares are up 12.2% year-to-date as of the close of trading on Monday.
rates Men's Wearhouse as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- MW's revenue growth has slightly outpaced the industry average of 0.6%. Since the same quarter one year prior, revenues slightly increased by 2.3%. 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.
- MW's debt-to-equity ratio is very low at 0.09 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 0.41 is very weak and demonstrates a lack of ability to pay short-term obligations.
- Compared to its closing price of one year ago, MW's share price has jumped by 47.93%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- 48.42% is the gross profit margin for MENS WEARHOUSE INC which we consider to be strong. Regardless of MW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.61% trails the industry average.
- MENS WEARHOUSE INC's earnings per share declined by 47.7% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, MENS WEARHOUSE INC reported lower earnings of $1.65 versus $2.55 in the prior year. This year, the market expects an improvement in earnings ($3.17 versus $1.65).
- You can view the full Men's Wearhouse Ratings Report.