Heavy Trading On Staples (SPLS) Before Market Open

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

  • SPLS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $110.6 million.
  • SPLS traded 1.4 million shares today in the pre-market hours as of 8:00 AM, representing 15.8% of its average daily volume.

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More details on SPLS:

Staples, Inc., together with its subsidiaries, operates as an office products company. It operates in three segments: North American Stores & Online, North American Commercial, and International Operations. The stock currently has a dividend yield of 3.6%. SPLS has a PE ratio of 15.3. Currently there are 5 analysts that rate Staples a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for Staples has been 8.7 million shares per day over the past 30 days. Staples has a market cap of $8.8 billion and is part of the services sector and specialty retail industry. The stock has a beta of 1.77 and a short float of 12.9% with 9.59 days to cover. Shares are down 15.3% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Staples as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, attractive valuation levels, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • 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 122.7% when compared to the same quarter one year prior, rising from -$596.25 million to $135.23 million.
  • The current debt-to-equity ratio, 0.33, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.74 is somewhat weak and could be cause for future problems.
  • STAPLES INC reported significant earnings per share improvement 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, STAPLES INC swung to a loss, reporting -$0.25 versus $1.41 in the prior year. This year, the market expects an improvement in earnings ($1.23 versus -$0.25).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.5%. Since the same quarter one year prior, revenues slightly dropped by 3.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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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