Today's Dead Cat Bounce Stock Is Fresh Market (TFM)

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 Fresh Market ( TFM) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Fresh Market as such a stock due to the following factors:

  • TFM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $31.0 million.
  • TFM has traded 130,048 shares today.
  • TFM is up 3.1% today.
  • TFM was down 10.4% yesterday.

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More details on TFM:

The Fresh Market, Inc. operates as a specialty food retailer in the United States. TFM has a PE ratio of 34.1. Currently there are 6 analysts that rate Fresh Market a buy, no analysts rate it a sell, and 9 rate it a hold.

The average volume for Fresh Market has been 952,700 shares per day over the past 30 days. Fresh Market has a market cap of $1.7 billion and is part of the services sector and retail industry. The stock has a beta of 0.19 and a short float of 19.2% with 8.85 days to cover. Shares are down 20.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Fresh Market as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and premium valuation.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 6.3%. Since the same quarter one year prior, revenues rose by 15.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 130.55% to $35.75 million when compared to the same quarter last year. In addition, FRESH MARKET INC has also vastly surpassed the industry average cash flow growth rate of -7.19%.
  • TFM's debt-to-equity ratio is very low at 0.20 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.22 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • The gross profit margin for FRESH MARKET INC is currently lower than what is desirable, coming in at 33.51%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.46% trails that of 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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