Water-Logged And Getting Wetter: Sally Beauty Holdings (SBH)
Trade-Ideas LLC identified Sally Beauty Holdings ( SBH) 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 Sally Beauty Holdings as such a stock due to the following factors:
- SBH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $43.2 million.
- SBH has traded 384,952 shares today.
- SBH traded in a range 209.1% of the normal price range with a price range of $1.29.
- SBH traded below 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 '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 SBH: Sally Beauty Holdings, Inc., together with its subsidiaries, operates as a specialty retailer and distributor of professional beauty supplies primarily in North America, South America, and Europe. The company operates through two segments, Sally Beauty Supply and Beauty Systems Group. SBH has a PE ratio of 21. Currently there are 6 analysts that rate Sally Beauty Holdings a buy, 1 analyst rates it a sell, and 6 rate it a hold. The average volume for Sally Beauty Holdings has been 1.4 million shares per day over the past 30 days. Sally Beauty has a market cap of $4.6 billion and is part of the services sector and specialty retail industry. The stock has a beta of 0.66 and a short float of 4.4% with 4.24 days to cover. Shares are up 14.6% year-to-date as of the close of trading on Wednesday.
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Analysis:
rates Sally Beauty Holdings as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and feeble growth in the company's earnings per share. Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 11.2%. Since the same quarter one year prior, revenues slightly increased by 3.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has increased to $69.13 million or 21.20% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 10.05%.
- 49.50% is the gross profit margin for SALLY BEAUTY HOLDINGS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 4.23% trails the industry average.
- SALLY BEAUTY HOLDINGS INC's earnings per share declined by 20.0% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, SALLY BEAUTY HOLDINGS INC reported lower earnings of $1.49 versus $1.51 in the prior year. This year, the market expects an improvement in earnings ($1.74 versus $1.49).
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Specialty Retail industry average. The net income has decreased by 23.1% when compared to the same quarter one year ago, dropping from $54.91 million to $42.24 million.
- You can view the full Sally Beauty Holdings Ratings Report.
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