Cabela's (CAB): Heavy Pre-Market Activity

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 Cabela's ( CAB) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Cabela's as such a stock due to the following factors:

  • CAB has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $66.1 million.
  • CAB traded 299,532 shares today in the pre-market hours as of 9:12 AM, representing 28% of its average daily volume.

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More details on CAB:

Cabela's Incorporated, together with its subsidiaries, operates as a specialty retailer and direct marketer of hunting, fishing, camping, and related outdoor merchandise. The company operates through three segments: Retail, Direct, and Financial Services. CAB has a PE ratio of 24.0. Currently there are 5 analysts that rate Cabela's a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Cabela's has been 748,700 shares per day over the past 30 days. Cabela's has a market cap of $5.0 billion and is part of the services sector and specialty retail industry. The stock has a beta of 2.03 and a short float of 20.6% with 9.11 days to cover. Shares are up 5.9% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Cabela's 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, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • CAB's revenue growth has slightly outpaced the industry average of 7.0%. Since the same quarter one year prior, revenues rose by 14.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CABELAS INC has improved earnings per share by 16.7% 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, CABELAS INC increased its bottom line by earning $2.42 versus $2.02 in the prior year. This year, the market expects an improvement in earnings ($3.42 versus $2.42).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Specialty Retail industry average. The net income increased by 16.6% when compared to the same quarter one year prior, going from $42.79 million to $49.89 million.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 36.11% over the past year, a rise that has exceeded that of the S&P 500 Index. 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.
  • 44.66% is the gross profit margin for CABELAS INC which we consider to be strong. Regardless of CAB's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.87% trails the industry average.

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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