Watch Out: Barbarians At The Gate For Flowers Foods (FLO)
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 Flowers Foods as such a stock due to the following factors:
- FLO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $37.7 million.
- FLO has traded 905,461 shares today.
- FLO traded in a range 303.7% of the normal price range with a price range of $1.14.
- FLO traded above its daily resistance level (quality: 1 day, meaning that the stock is crossing a resistance level set by the last 1 calendar day. 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 FLO:
Flowers Foods, Inc. produces and markets bakery products in the United States. It operates through two segments, Direct-Store-Delivery (DSD) and Warehouse Delivery. The DSD segment produces and markets fresh bakery foods, including fresh breads, buns, rolls, tortillas, and snack cakes. The stock currently has a dividend yield of 3.1%. FLO has a PE ratio of 21. Currently there are 2 analysts that rate Flowers Foods a buy, no analysts rate it a sell, and 3 rate it a hold.
The average volume for Flowers Foods has been 1.9 million shares per day over the past 30 days. Flowers has a market cap of $4.0 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 0.88 and a short float of 9.8% with 8.53 days to cover. Shares are down 14.5% year-to-date as of the close of trading on Wednesday.
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Analysis:
rates Flowers Foods as a
. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- FLOWERS FOODS INC has improved earnings per share by 15.4% 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, FLOWERS FOODS INC increased its bottom line by earning $0.89 versus $0.83 in the prior year. This year, the market expects an improvement in earnings ($1.02 versus $0.89).
- The debt-to-equity ratio is somewhat low, currently at 0.83, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.78 is somewhat weak and could be cause for future problems.
- FLO has underperformed the S&P 500 Index, declining 15.47% 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.
- Net operating cash flow has significantly decreased to $43.69 million or 53.38% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full Flowers Foods Ratings Report.
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