Storm The Castle Stock Of The Day: Darden Restaurants (DRI)
Trade-Ideas LLC identified
(
) 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 Darden Restaurants as such a stock due to the following factors:
- DRI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $89.7 million.
- DRI has traded 961,333 shares today.
- DRI is trading at 2.23 times the normal volume for the stock at this time of day.
- DRI 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 DRI:
Darden Restaurants, Inc., through its subsidiaries, owns and operates full-service restaurants in the United States and Canada. The stock currently has a dividend yield of 3.2%. DRI has a PE ratio of 24. Currently there are 7 analysts that rate Darden Restaurants a buy, 2 analysts rate it a sell, and 8 rate it a hold.
The average volume for Darden Restaurants has been 1.8 million shares per day over the past 30 days. Darden has a market cap of $8.0 billion and is part of the services sector and leisure industry. The stock has a beta of 0.12 and a short float of 11.9% with 9.96 days to cover. Shares are down 0.6% year-to-date as of the close of trading on Monday.
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Analysis:
rates Darden Restaurants as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, 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 sub par growth in net income.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 11.5%. Since the same quarter one year prior, revenues slightly increased by 6.7%. 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 $405.00 million or 10.92% when compared to the same quarter last year. In addition, DARDEN RESTAURANTS INC has also modestly surpassed the industry average cash flow growth rate of 8.95%.
- DRI's debt-to-equity ratio is very low at 0.23 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 0.22 is very weak and demonstrates a lack of ability to pay short-term obligations.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, DARDEN RESTAURANTS INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full Darden Restaurants Ratings Report.
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