Trade-Ideas LLC identified

Ross Stores

(

ROST

) 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 Ross Stores as such a stock due to the following factors:

  • ROST has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $138.1 million.
  • ROST has traded 157,842 shares today.
  • ROST traded in a range 203.4% of the normal price range with a price range of $2.31.
  • ROST traded above its daily resistance level (quality: 130 days, meaning that the stock is crossing a resistance level set by the last 130 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 ROST:

Ross Stores, Inc., together with its subsidiaries, operates off-price retail apparel and home fashion stores under the Ross Dress for Less and dd's DISCOUNTS brand names in the United States. It primarily offers apparel, accessories, footwear, and home fashions. The stock currently has a dividend yield of 0.9%. ROST has a PE ratio of 22. Currently there are 9 analysts that rate Ross Stores a buy, no analysts rate it a sell, and 9 rate it a hold.

The average volume for Ross Stores has been 3.1 million shares per day over the past 30 days. Ross Stores has a market cap of $22.0 billion and is part of the services sector and retail industry. The stock has a beta of 1.32 and a short float of 2.6% with 4.24 days to cover. Shares are up 15.4% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Ross Stores as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, increase in net income and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • ROST's revenue growth has slightly outpaced the industry average of 4.4%. Since the same quarter one year prior, revenues slightly increased by 7.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. 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.
  • ROSS STORES INC has improved earnings per share by 14.0% 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, ROSS STORES INC increased its bottom line by earning $2.21 versus $1.94 in the prior year. This year, the market expects an improvement in earnings ($2.49 versus $2.21).
  • 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 11.9% when compared to the same quarter one year prior, going from $192.72 million to $215.66 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Specialty Retail industry and the overall market, ROSS STORES INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.

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