Watch Out: Barbarians At The Gate For Papa John's International (PZZA)
Trade-Ideas LLC identified Papa John's International ( PZZA) 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 Papa John's International as such a stock due to the following factors:
- PZZA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $23.2 million.
- PZZA has traded 716,541 shares today.
- PZZA traded in a range 286.8% of the normal price range with a price range of $4.30.
- PZZA traded above its daily resistance level (quality: 8 days, meaning that the stock is crossing a resistance level set by the last 8 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 PZZA: Papa John's International, Inc. operates and franchises pizza delivery and carryout restaurants under the Papa John's trademark in the United States and internationally. The stock currently has a dividend yield of 1.2%. PZZA has a PE ratio of 3. Currently there are no analysts that rate Papa John's International a buy, no analysts rate it a sell, and 3 rate it a hold. The average volume for Papa John's International has been 513,400 shares per day over the past 30 days. Papa John's International has a market cap of $2.2 billion and is part of the services sector and leisure industry. The stock has a beta of 0.36 and a short float of 13.2% with 9.01 days to cover. Shares are down 0.5% year-to-date as of the close of trading on Tuesday.
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Analysis:
rates Papa John's International as a
. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, notable return on equity and good cash flow from operations. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated. Highlights from the ratings report include:
- PAPA JOHNS INTERNATIONAL INC has improved earnings per share by 19.2% 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, PAPA JOHNS INTERNATIONAL INC increased its bottom line by earning $1.89 versus $1.76 in the prior year. This year, the market expects an improvement in earnings ($2.35 versus $1.89).
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Hotels, Restaurants & Leisure industry average. The net income increased by 16.6% when compared to the same quarter one year prior, going from $21.18 million to $24.70 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, PAPA JOHNS INTERNATIONAL INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has slightly increased to $40.57 million or 7.32% when compared to the same quarter last year. In addition, PAPA JOHNS INTERNATIONAL INC has also vastly surpassed the industry average cash flow growth rate of -72.96%.
- PZZA, with its decline in revenue, underperformed when compared the industry average of 10.8%. Since the same quarter one year prior, revenues slightly dropped by 2.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full Papa John's International Ratings Report.
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