Trade-Ideas LLC identified

Panera Bread

(

PNRA

) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Panera Bread as such a stock due to the following factors:

  • PNRA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $94.6 million.
  • PNRA has traded 275,471 shares today.
  • PNRA is trading at 20.35 times the normal volume for the stock at this time of day.
  • PNRA crossed below its 200-day simple moving average.

'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend.

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More details on PNRA:

TheStreet Recommends

Panera Bread Company owns, operates, and franchises retail bakery-cafes in the United States and Canada. The company operates through three segments: Bakery-Cafe Operations, Franchise Operations, and Fresh Dough and Other Product Operations. PNRA has a PE ratio of 31. Currently there are 11 analysts that rate Panera Bread a buy, no analysts rate it a sell, and 11 rate it a hold.

The average volume for Panera Bread has been 513,900 shares per day over the past 30 days. Panera Bread has a market cap of $4.6 billion and is part of the services sector and leisure industry. The stock has a beta of 0.46 and a short float of 9.7% with 3.92 days to cover. Shares are up 6.5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Panera Bread as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, solid stock price performance, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:

  • PNRA's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 7.2%. 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.
  • Net operating cash flow has increased to $97.59 million or 18.91% when compared to the same quarter last year. In addition, PANERA BREAD CO has also vastly surpassed the industry average cash flow growth rate of -59.32%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • PNRA's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that PNRA's debt-to-equity ratio is low, the quick ratio, which is currently 0.52, displays a potential problem in covering short-term cash needs.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, PANERA BREAD CO's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.

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