Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Sears Holdings Corporation as such a stock due to the following factors:
- SHLD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $66.3 million.
- SHLD has traded 103,684 shares today.
- SHLD is up 3.2% today.
- SHLD was down 7% yesterday.
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More details on SHLD:
Sears Holdings Corporation operates as a specialty retailer in the United States and Canada. The company's Kmart segment operates stores that sell merchandise under Jaclyn Smith and Joe Boxer labels; and Sears brand products, such as Kenmore, Craftsman, and DieHard. Currently there are no analysts that rate Sears Holdings Corporation a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for Sears Holdings Corporation has been 2.0 million shares per day over the past 30 days. Sears has a market cap of $4.4 billion and is part of the services sector and retail industry. The stock has a beta of 3.03 and a short float of 60.6% with 9.06 days to cover. Shares are down 16.5% year-to-date as of the close of trading on Monday.
rates Sears Holdings Corporation as a
. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- The debt-to-equity ratio is very high at 2.51 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.12, which clearly demonstrates the inability to cover short-term cash needs.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Multiline Retail industry and the overall market, SEARS HOLDINGS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for SEARS HOLDINGS CORP is rather low; currently it is at 23.34%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -6.45% trails that of the industry average.
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, SHLD has underperformed the S&P 500 Index, declining 14.10% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The change in net income from the same quarter one year ago has significantly exceeded that of the Multiline Retail industry average, but is less than that of the S&P 500. The net income has decreased by 7.2% when compared to the same quarter one year ago, dropping from -$498.00 million to -$534.00 million.
- You can view the full Sears Holdings Corporation Ratings Report.