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 "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 Ralph Lauren Corp Class A as such a stock due to the following factors:
- RL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $135.9 million.
- RL has traded 563,080 shares today.
- RL traded in a range 204.9% of the normal price range with a price range of $3.86.
- RL traded above its daily resistance level (quality: 83 days, meaning that the stock is crossing a resistance level set by the last 83 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 RL:
Ralph Lauren Corporation designs, markets, and distributes lifestyle products worldwide. The company operates in three segments: Wholesale, Retail, and Licensing. The stock currently has a dividend yield of 1.1%. RL has a PE ratio of 18.5. Currently there are 8 analysts that rate Ralph Lauren Corp Class A a buy, no analysts rate it a sell, and 5 rate it a hold.
The average volume for Ralph Lauren Corp Class A has been 941,000 shares per day over the past 30 days. Ralph Lauren Corp Class A has a market cap of $9.6 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.31 and a short float of 2.9% with 1.84 days to cover. Shares are down 11% year-to-date as of the close of trading on Thursday.
rates Ralph Lauren Corp Class A as a
. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- RALPH LAUREN CORP has improved earnings per share by 22.6% 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, RALPH LAUREN CORP increased its bottom line by earning $8.42 versus $8.00 in the prior year. This year, the market expects an improvement in earnings ($8.72 versus $8.42).
- The net income growth from the same quarter one year ago has significantly exceeded that of the Textiles, Apparel & Luxury Goods industry average, but is less than that of the S&P 500. The net income increased by 20.3% when compared to the same quarter one year prior, going from $127.20 million to $153.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 14.8%. Since the same quarter one year prior, revenues rose by 13.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- RL's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, RL has a quick ratio of 2.10, which demonstrates the ability of the company to cover short-term liquidity needs.
- You can view the full Ralph Lauren Corp Class A Ratings Report.