Trade-Ideas: Ross Stores (ROST) Is Today's Post-Market Leader 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 Ross Stores ( ROST) as a post-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified Ross Stores as such a stock due to the following factors:

  • ROST has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $130.1 million.
  • ROST is up 4.3% today from today's close.

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More details on ROST:

Ross Stores, Inc., together with its subsidiaries, operates off-price retail apparel and home fashion stores under the Ross Dress for Less and dd's DISCOUNTS brand names in the United States. The company primarily offers apparel, accessories, footwear, and home fashions. The stock currently has a dividend yield of 1.2%. ROST has a PE ratio of 17.3. Currently there are 11 analysts that rate Ross Stores a buy, 1 analyst rates it a sell, and 6 rate it a hold.

The average volume for Ross Stores has been 1.7 million shares per day over the past 30 days. Ross Stores has a market cap of $14.3 billion and is part of the services sector and retail industry. The stock has a beta of 0.65 and a short float of 1.7% with 1.76 days to cover. Shares are down 9.1% year-to-date as of the close of trading on Wednesday.

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 Ross Stores as a buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Net operating cash flow has slightly increased to $340.78 million or 2.22% when compared to the same quarter last year. In addition, ROSS STORES INC has also modestly surpassed the industry average cash flow growth rate of -4.54%.
  • ROSS STORES INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, ROSS STORES INC increased its bottom line by earning $3.87 versus $3.53 in the prior year. This year, the market expects an improvement in earnings ($4.20 versus $3.87).
  • ROST's debt-to-equity ratio is very low at 0.07 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 0.37 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 4.6%. Since the same quarter one year prior, revenues slightly dropped by 0.7%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • In its most recent trading session, ROST has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.

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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