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 "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Ann as such a stock due to the following factors:
- ANN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $33.1 million.
- ANN has traded 3.6 million shares today.
- ANN traded in a range 225.6% of the normal price range with a price range of $2.00.
- ANN traded above its daily resistance level (quality: 20 days, meaning that the stock is crossing a resistance level set by the last 20 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock s movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.
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More details on ANN:
ANN Inc., through its subsidiaries, engages in the retailing of women's apparel, shoes, and accessories under the Ann Taylor and LOFT brands. ANN has a PE ratio of 16.6. Currently there are 7 analysts that rate Ann a buy, no analysts rate it a sell, and 8 rate it a hold.
The average volume for Ann has been 1.0 million shares per day over the past 30 days. Ann has a market cap of $1.5 billion and is part of the services sector and retail industry. The stock has a beta of 1.30 and a short float of 11% with 5.24 days to cover. Shares are down 3.6% year to date as of the close of trading on Thursday.
rates Ann as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, increase in stock price during the past year, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- ANN's revenue growth trails the industry average of 14.9%. Since the same quarter one year prior, revenues slightly increased by 2.5%. 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.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. 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.
- ANN INC's earnings per share declined by 24.1% 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, ANN INC increased its bottom line by earning $2.10 versus $1.63 in the prior year. This year, the market expects an improvement in earnings ($2.16 versus $2.10).
- The gross profit margin for ANN INC is rather high; currently it is at 60.20%. Regardless of ANN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.63% trails the industry average.
- You can view the full Ann Ratings Report.