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 "water-logged and getting wetter" (weak stocks crossing below support 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 $147.5 million.
- ROST has traded 358,047 shares today.
- ROST traded in a range 259.3% of the normal price range with a price range of $2.74.
- ROST traded below its daily resistance level (quality: 4 days, meaning that the stock is crossing a resistance level set by the last 4 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' 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 negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.
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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. The company primarily offers apparel, accessories, footwear, and home fashions. The stock currently has a dividend yield of 1.2%. ROST has a PE ratio of 17.7. Currently there are 11 analysts that rate Ross Stores a buy, 1 analyst rates it a sell, and 6 rate it a hold.
The average volume for Ross Stores has been 1.8 million shares per day over the past 30 days. Ross Stores has a market cap of $14.6 billion and is part of the services sector and retail industry. The stock has a beta of 0.65 and a short float of 1.7% with 1.49 days to cover. Shares are down 8.1% year-to-date as of the close of trading on Friday.
rates Ross Stores as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, good cash flow from operations, increase in net income and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- ROST's revenue growth has slightly outpaced the industry average of 3.4%. Since the same quarter one year prior, revenues slightly increased by 5.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- ROSS STORES INC has improved earnings per share by 7.5% 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 $3.87 versus $3.53 in the prior year. This year, the market expects an improvement in earnings ($4.20 versus $3.87).
- Net operating cash flow has increased to $504.58 million or 42.99% when compared to the same quarter last year. In addition, ROSS STORES INC has also vastly surpassed the industry average cash flow growth rate of -8.51%.
- The net income growth from the same quarter one year ago has exceeded that of the Specialty Retail industry average, but is less than that of the S&P 500. The net income increased by 4.0% when compared to the same quarter one year prior, going from $234.61 million to $243.91 million.
- ROST's debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.43 is very weak and demonstrates a lack of ability to pay short-term obligations.
- You can view the full Ross Stores Ratings Report.