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 $75.3 million.
  • DSW has traded 940,506 shares today.
  • DSW is up 3.6% today.
  • DSW was down 11.6% 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 3.7%. DSW has a PE ratio of 14. Currently there are 4 analysts that rate DSW a buy, 2 analysts rate it a sell, and 8 rate it a hold.

The average volume for DSW has been 1.7 million shares per day over the past 30 days. DSW has a market cap of $1.8 billion and is part of the services sector and retail industry. The stock has a beta of 0.77 and a short float of 10% with 1.87 days to cover. Shares are down 19.5% 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

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and disappointing return on equity.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 13.2%. Since the same quarter one year prior, revenues slightly increased by 5.0%. 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.
  • 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. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.87 is somewhat weak and could be cause for future problems.
  • The gross profit margin for DSW INC is currently lower than what is desirable, coming in at 27.35%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.75% trails that of the industry average.
  • 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 61.8% when compared to the same quarter one year ago, falling from $30.78 million to $11.76 million.

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