Trade-Ideas: Kroger (KR) Is Today's New Lifetime High Stock

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 Kroger ( KR) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Kroger as such a stock due to the following factors:

  • KR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $161.7 million.
  • KR has traded 300 shares today.
  • KR is trading at a new lifetime high.

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More details on KR:

The Kroger Co., together with its subsidiaries, operates as a retailer worldwide. The company also manufactures and processes food for sale in its supermarkets. It operates retail food and drug stores, multi-department stores, jewelry stores, and convenience stores. The stock currently has a dividend yield of 1.4%. KR has a PE ratio of 16.1. Currently there are 7 analysts that rate Kroger a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Kroger has been 4.3 million shares per day over the past 30 days. Kroger has a market cap of $23.9 billion and is part of the services sector and retail industry. The stock has a beta of 0.97 and a short float of 2.8% with 4.04 days to cover. Shares are up 17.7% 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 Kroger as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, KR's share price has jumped by 31.43%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, KR should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • KROGER CO's earnings per share declined by 8.0% 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, KROGER CO increased its bottom line by earning $2.90 versus $2.77 in the prior year. This year, the market expects an improvement in earnings ($3.22 versus $2.90).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.5%. Since the same quarter one year prior, revenues slightly dropped by 3.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Food & Staples Retailing industry and the overall market, KROGER CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The change in net income from the same quarter one year ago has exceeded that of the Food & Staples Retailing industry average, but is less than that of the S&P 500. The net income has decreased by 8.7% when compared to the same quarter one year ago, dropping from $462.00 million to $422.00 million.

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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