Trade-Ideas: Buffalo Wild Wings (BWLD) 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 Buffalo Wild Wings ( BWLD) 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 Buffalo Wild Wings as such a stock due to the following factors:

  • BWLD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $89.5 million.
  • BWLD has traded 333,205 shares today.
  • BWLD traded in a range 239.3% of the normal price range with a price range of $10.99.
  • BWLD traded below its daily resistance level (quality: 6 days, meaning that the stock is crossing a resistance level set by the last 6 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 BWLD:

Buffalo Wild Wings, Inc. engages in the ownership, operation, and franchise of restaurants primarily in the United States. It offers chicken and various food and beverage items, as well as serves bottled beers, wines, and liquor. BWLD has a PE ratio of 38.0. Currently there are 9 analysts that rate Buffalo Wild Wings a buy, 1 analyst rates it a sell, and 9 rate it a hold.

The average volume for Buffalo Wild Wings has been 363,000 shares per day over the past 30 days. Buffalo Wild Wings has a market cap of $2.6 billion and is part of the services sector and leisure industry. Shares are down 4.4% 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 Buffalo Wild Wings as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 3.4%. Since the same quarter one year prior, revenues rose by 27.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 66.66% and other important driving factors, this stock has surged by 82.22% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, BWLD should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • BUFFALO WILD WINGS 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, BUFFALO WILD WINGS INC increased its bottom line by earning $3.06 versus $2.73 in the prior year. This year, the market expects an improvement in earnings ($3.75 versus $3.06).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 66.9% when compared to the same quarter one year prior, rising from $10.71 million to $17.87 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 Hotels, Restaurants & Leisure industry and the overall market, BUFFALO WILD WINGS INC's return on equity exceeds that of both the industry average and the S&P 500.

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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