Trade-Ideas: Pier 1 Imports (PIR) 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 Pier 1 Imports ( PIR) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Pier 1 Imports as such a stock due to the following factors:

  • PIR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $27.3 million.
  • PIR has traded 216,818 shares today.
  • PIR is up 3% today.
  • PIR was down 12.3% yesterday.

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More details on PIR:

Pier 1 Imports, Inc. operates as an importer and specialty retailer of imported decorative home furnishings and gifts. The company is also involved in e-commerce business. The stock currently has a dividend yield of 1%. PIR has a PE ratio of 19.6. Currently there are 10 analysts that rate Pier 1 Imports a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Pier 1 Imports has been 1.3 million shares per day over the past 30 days. Pier 1 Imports has a market cap of $2.4 billion and is part of the services sector and retail industry. The stock has a beta of 1.40 and a short float of 6.5% with 4.65 days to cover. Shares are down 11.4% year-to-date as of the close of trading on Thursday.

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 Pier 1 Imports as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year and growth in earnings per share. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • PIR's revenue growth has slightly outpaced the industry average of 8.2%. Since the same quarter one year prior, revenues slightly increased by 9.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has significantly increased by 150.51% to $71.60 million when compared to the same quarter last year. In addition, PIER 1 IMPORTS INC/DE has also vastly surpassed the industry average cash flow growth rate of 4.43%.
  • PIR's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that PIR's debt-to-equity ratio is low, the quick ratio, which is currently 0.56, displays a potential problem in covering short-term cash needs.
  • The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • PIER 1 IMPORTS INC/DE has improved earnings per share by 18.2% in the most recent quarter compared to the same quarter a year ago. 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, PIER 1 IMPORTS INC/DE reported lower earnings of $1.20 versus $1.51 in the prior year. This year, the market expects an improvement in earnings ($1.23 versus $1.20).

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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