Trade-Ideas: TJX Companies (TJX) 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 TJX Companies ( TJX) 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 TJX Companies as such a stock due to the following factors:

  • TJX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $193.4 million.
  • TJX has traded 2.9 million shares today.
  • TJX traded in a range 234.1% of the normal price range with a price range of $2.00.
  • TJX traded below its daily resistance level (quality: 83 days, meaning that the stock is crossing a resistance level set by the last 83 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 TJX:

The TJX Companies, Inc. operates as an off-price apparel and home fashions retailer in the United States and internationally. The company operates in four segments: Marmaxx, HomeGoods, TJX Canada, and TJX Europe. The stock currently has a dividend yield of 0.9%. TJX has a PE ratio of 20.9. Currently there are 9 analysts that rate TJX Companies a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for TJX Companies has been 3.1 million shares per day over the past 30 days. TJX Companies has a market cap of $44.0 billion and is part of the services sector and retail industry. The stock has a beta of 0.41 and a short float of 1.4% with 2.83 days to cover. Shares are down 2.9% 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 TJX Companies 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, notable return on equity and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • TJX's revenue growth has slightly outpaced the industry average of 7.7%. Since the same quarter one year prior, revenues slightly increased by 8.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • TJX COMPANIES INC has improved earnings per share by 38.7% 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, TJX COMPANIES INC increased its bottom line by earning $2.55 versus $1.94 in the prior year. This year, the market expects an improvement in earnings ($2.86 versus $2.55).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Specialty Retail industry average. The net income increased by 34.9% when compared to the same quarter one year prior, rising from $461.55 million to $622.66 million.
  • 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 Specialty Retail industry and the overall market, TJX COMPANIES INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has slightly increased to $822.09 million or 6.45% when compared to the same quarter last year. In addition, TJX COMPANIES INC has also modestly surpassed the industry average cash flow growth rate of 3.70%.

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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