Trade-Ideas LLC identified

Ascena Retail Group

(

ASNA

) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Ascena Retail Group as such a stock due to the following factors:

  • ASNA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $83.6 million.
  • ASNA has traded 932,508 shares today.
  • ASNA is trading at 2.02 times the normal volume for the stock at this time of day.
  • ASNA crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on ASNA:

Ascena Retail Group, Inc., through its subsidiaries, operates as a specialty retailer of clothing, shoes, and accessories for missy, plus-size women, and tween girls in the United States, Canada, and Puerto Rico. Currently there are 5 analysts that rate Ascena Retail Group a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Ascena Retail Group has been 4.2 million shares per day over the past 30 days. Ascena Retail Group has a market cap of $2.6 billion and is part of the services sector and retail industry. The stock has a beta of 1.60 and a short float of 13.8% with 3.14 days to cover. Shares are up 5.7% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Ascena Retail Group as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and feeble growth in its earnings per share.

Highlights from the ratings report include:

  • 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 Specialty Retail industry. The net income has significantly decreased by 2159.9% when compared to the same quarter one year ago, falling from $15.70 million to -$323.40 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Specialty Retail industry and the overall market, ASCENA RETAIL GROUP INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • ASCENA RETAIL GROUP INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ASCENA RETAIL GROUP INC swung to a loss, reporting -$1.46 versus $0.84 in the prior year. This year, the market expects an improvement in earnings ($0.78 versus -$1.46).
  • ASNA, with its decline in revenue, underperformed when compared the industry average of 10.0%. Since the same quarter one year prior, revenues slightly dropped by 1.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for ASCENA RETAIL GROUP INC is rather high; currently it is at 54.51%. Regardless of ASNA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ASNA's net profit margin of -27.64% significantly underperformed when compared to the industry average.

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