Trade-Ideas: Tech Data (TECD) Is Today's "Dead Cat Bounce" Stock - TheStreet

Trade-Ideas LLC identified

Tech Data

(

TECD

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Tech Data as such a stock due to the following factors:

  • TECD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $42.5 million.
  • TECD has traded 1.2 million shares today.
  • TECD is up 3.1% today.
  • TECD was down 10.1% yesterday.

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More details on TECD:

Tech Data Corporation engages in the wholesale distribution of technology products. TECD has a PE ratio of 11. Currently there is 1 analyst that rates Tech Data a buy, 3 analysts rate it a sell, and 2 rate it a hold.

The average volume for Tech Data has been 458,000 shares per day over the past 30 days. Tech Data has a market cap of $2.7 billion and is part of the services sector and wholesale industry. The stock has a beta of 0.61 and a short float of 10.8% with 5.56 days to cover. Shares are up 7.7% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Tech Data as a

buy

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, attractive valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • Powered by its strong earnings growth of 102.91% and other important driving factors, this stock has surged by 25.25% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TECD should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income increased by 94.3% when compared to the same quarter one year prior, rising from $39.33 million to $76.41 million.
  • Net operating cash flow has significantly increased by 541.45% to $200.32 million when compared to the same quarter last year. In addition, TECH DATA CORP has also vastly surpassed the industry average cash flow growth rate of 0.12%.
  • TECD's debt-to-equity ratio is very low at 0.19 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.91 is somewhat weak and could be cause for future problems.

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