Trade-Ideas: Conn's (CONN) Is Today's

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

  • CONN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $98.4 million.
  • CONN has traded 175,894 shares today.
  • CONN is up 3% today.
  • CONN was down 11.9% yesterday.

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More details on CONN:

Conn's, Inc. engages in the specialty retail of durable consumer products in the United States. CONN has a PE ratio of 30.3. Currently there are 8 analysts that rate Conn's a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Conn's has been 534,400 shares per day over the past 30 days. Conn's has a market cap of $2.2 billion and is part of the services sector and retail industry. The stock has a beta of 1.04 and a short float of 18% with 2.36 days to cover. Shares are up 73.5% year to date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Conn's as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • CONN's revenue growth has slightly outpaced the industry average of 22.6%. Since the same quarter one year prior, revenues rose by 25.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CONN'S INC reported significant earnings per share improvement 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, CONN'S INC turned its bottom line around by earning $1.55 versus -$0.12 in the prior year. This year, the market expects an improvement in earnings ($2.64 versus $1.55).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Specialty Retail industry. The net income increased by 91.9% when compared to the same quarter one year prior, rising from $11.56 million to $22.18 million.
  • The gross profit margin for CONN'S INC is rather high; currently it is at 51.78%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 8.84% is above that of the industry average.
  • Powered by its strong earnings growth of 74.28% and other important driving factors, this stock has surged by 200.83% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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