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 Panera Bread Company ( PNRA) as a "roof leaker" (crossing below the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Panera Bread Company as such a stock due to the following factors:
- PNRA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $84.0 million.
- PNRA has traded 578,519 shares today.
- PNRA is trading at 13.30 times the normal volume for the stock at this time of day.
- PNRA crossed below its 200-day simple moving average.
'Roof Leaker' stocks are worth watching because trading stocks that begin to experience a breakdown can lead to potentially massive losses. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock may then be subject to emotional selling from investors that can continue to drive the stock lower. Regardless of the impetus behind the price and volume action, when a stock moves with weakness and volume it can indicate the start of a new, potentially dangerous, trend. EXCLUSIVE OFFER: Get the inside scoop on opportunities in PNRA with the Ticky from Trade-Ideas. See the FREE profile for PNRA NOW at Trade-Ideas More details on PNRA: Panera Bread Company, together with its subsidiaries, owns, operates, and franchises retail bakery-cafes in the United States and Canada. The company operates in three segments: Bakery-Cafe Operations, Franchise Operations, and Fresh Dough and Other Product Operations. PNRA has a PE ratio of 27.3. Currently there are 9 analysts that rate Panera Bread Company a buy, 2 analysts rate it a sell, and 11 rate it a hold. The average volume for Panera Bread Company has been 542,700 shares per day over the past 30 days. Panera Bread has a market cap of $4.9 billion and is part of the services sector and leisure industry. The stock has a beta of 1.11 and a short float of 9.7% with 5.58 days to cover. Shares are up 5.2% 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 Panera Bread Company as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year, growth in earnings per share, 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:
- The revenue growth came in higher than the industry average of 3.4%. Since the same quarter one year prior, revenues rose by 15.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- PANERA BREAD CO has improved earnings per share by 12.0% 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, PANERA BREAD CO increased its bottom line by earning $6.82 versus $5.89 in the prior year. This year, the market expects an improvement in earnings ($6.95 versus $6.82).
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, PANERA BREAD CO's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- Net operating cash flow has significantly increased by 95.66% to $136.91 million when compared to the same quarter last year. In addition, PANERA BREAD CO has also vastly surpassed the industry average cash flow growth rate of -33.04%.
- You can view the full Panera Bread Company 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.