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 Ralph Lauren ( RL) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Ralph Lauren 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 $253.0 million.
- RL has traded 36,728 shares today.
- RL is trading at 2.80 times the normal volume for the stock at this time of day.
- RL crossed above its 200-day simple moving average.
'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success. EXCLUSIVE OFFER: Get the inside scoop on opportunities in RL with the Ticky from Trade-Ideas. See the FREE profile for RL NOW at Trade-Ideas More details on RL: Ralph Lauren Corporation engages in the design, marketing, and distribution of lifestyle products. The stock currently has a dividend yield of 1%. RL has a PE ratio of 22.0. Currently there are 7 analysts that rate Ralph Lauren a buy, no analysts rate it a sell, and 6 rate it a hold. The average volume for Ralph Lauren has been 905,500 shares per day over the past 30 days. Ralph Lauren has a market cap of $10.4 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.21 and a short float of 1.9% with 0.77 days to cover. Shares are up 14.4% year to date as of the close of trading on Tuesday. 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 Ralph Lauren as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 7.0%. Since the same quarter one year prior, revenues slightly increased by 2.8%. 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.
- RL's debt-to-equity ratio is very low at 0.15 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 1.66, which demonstrates the ability of the company to cover short-term liquidity needs.
- RALPH LAUREN CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, RALPH LAUREN CORP increased its bottom line by earning $8.00 versus $7.13 in the prior year. This year, the market expects an improvement in earnings ($8.50 versus $8.00).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market on the basis of return on equity, RALPH LAUREN CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full Ralph Lauren Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.