TIF was a great investment from its 2011 low until the end of 2014. The price of this renowned retailer with its iconic blue bags and boxes more than doubled.
The story in the past year for TIF is different and the chart is "pitted" with some important price gaps. Gaps are price voids created as the supply and demand for a security adjusts to news that was not already discounted.
TIF gapped sharply lower in January 2015. Prices eventually stabilized and actually made an upside gap in May. Prices were unable to build much on this gap and rolled over, turning down in the past month.
TIF has been trying to hold in the mid-to-low-$80s, a key level on the chart that has acted as support several times as can be seen in this chart below.
Support and resistance are terms used by chartists and help describe the price action. A support is an area or zone of price consolidation or congestion where buyers overcome selling pressure. Resistance is a level or area at which sellers overcome buying pressure.
Notice how the mid-$80s has acted as support several times. When support is broken (prices move below the support area) it can become resistance as traders who might still own TIF become sellers to get out at their entry price.
So what's inside the blue box now? It could be something tarnished. A breakdown in the price of TIF could carry to the next support area around $70.
Separately, TheStreet Ratings team rates TIFFANY & CO as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate TIFFANY & CO (TIF) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, TIF has a quick ratio of 1.59, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for TIFFANY & CO is rather high; currently it is at 64.20%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 10.89% is above that of the industry average.
- Net operating cash flow has significantly increased by 87.42% to $143.60 million when compared to the same quarter last year. In addition, TIFFANY & CO has also vastly surpassed the industry average cash flow growth rate of -2.00%.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Specialty Retail industry and the overall market on the basis of return on equity, TIFFANY & CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- TIFFANY & CO's earnings per share declined by 16.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, TIFFANY & CO increased its bottom line by earning $3.73 versus $1.40 in the prior year. This year, the market expects an improvement in earnings ($4.25 versus $3.73).
- You can view the full analysis from the report here: TIF Ratings Report