Trade-Ideas LLC identified

DSW

(

DSW

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified DSW as such a stock due to the following factors:

  • DSW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $54.1 million.
  • DSW has traded 395,280 shares today.
  • DSW is up 3.1% today.
  • DSW was down 11.4% yesterday.

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More details on DSW:

DSW Inc., together with its subsidiaries, operates as a branded footwear and accessories retailer in the United States. The company operates through two segments, DSW and Affiliated Business Group. The stock currently has a dividend yield of 2.6%. DSW has a PE ratio of 17. Currently there are 10 analysts that rate DSW a buy, 1 analyst rates it a sell, and none rate it a hold.

TheStreet Recommends

The average volume for DSW has been 1.2 million shares per day over the past 30 days. DSW has a market cap of $2.5 billion and is part of the services sector and retail industry. The stock has a beta of 0.82 and a short float of 5.2% with 1.56 days to cover. Shares are down 26.7% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates DSW as a

buy

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:

  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. 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.
  • DSW INC has improved earnings per share by 26.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DSW INC increased its bottom line by earning $1.69 versus $1.64 in the prior year. This year, the market expects an improvement in earnings ($1.90 versus $1.69).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Specialty Retail industry average. The net income increased by 22.6% when compared to the same quarter one year prior, going from $38.64 million to $47.37 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.5%. Since the same quarter one year prior, revenues slightly increased by 9.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • DSW has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.10, which illustrates the ability to avoid short-term cash problems.

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