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 "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 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 $60.5 million.
- CONN has traded 972,458 shares today.
- CONN traded in a range 212.1% of the normal price range with a price range of $5.10.
- CONN traded above its daily resistance level (quality: 1 day, meaning that the stock is crossing a resistance level set by the last 1 calendar day. 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. EXCLUSIVE OFFER: Get the inside scoop on opportunities in CONN with the Ticky from Trade-Ideas. See the FREE profile for CONN NOW at Trade-Ideas More details on CONN: Conn's, Inc. is engaged in the specialty retail of durable consumer products in the United States. CONN has a PE ratio of 29.1. Currently there are 7 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 973,600 shares per day over the past 30 days. Conn's has a market cap of $2.4 billion and is part of the services sector and retail industry. The stock has a beta of 1.07 and a short float of 19.2% with 5.07 days to cover. Shares are down 14.9% year-to-date as of the close of trading on Wednesday. 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 robust 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 very impressive revenue growth greatly exceeded the industry average of 7.6%. Since the same quarter one year prior, revenues leaped by 50.6%. 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 ($2.77 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 106.8% when compared to the same quarter one year prior, rising from $11.79 million to $24.38 million.
- The gross profit margin for CONN'S INC is rather high; currently it is at 51.71%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 7.85% is above that of the industry average.
- Powered by its strong earnings growth of 88.57% and other important driving factors, this stock has surged by 159.11% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full Conn's 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.