Tiffany (TIF) Is Water-Logged And Getting Wetter Today

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 Tiffany ( TIF) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Tiffany as such a stock due to the following factors:

  • TIF has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $70.9 million.
  • TIF has traded 1.2 million shares today.
  • TIF traded in a range 219% of the normal price range with a price range of $3.36.
  • TIF traded below its daily resistance level (quality: 83 days, meaning that the stock is crossing a resistance level set by the last 83 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on TIF:

Tiffany & Co., through its subsidiaries, designs, manufactures, and retails jewelry worldwide. The company operates through Americas, Asia-Pacific, Japan, Europe, and Other segments. The stock currently has a dividend yield of 1.5%. TIF has a PE ratio of 57.4. Currently there are 7 analysts that rate Tiffany a buy, no analysts rate it a sell, and 10 rate it a hold.

The average volume for Tiffany has been 892,500 shares per day over the past 30 days. Tiffany has a market cap of $12.8 billion and is part of the services sector and specialty retail industry. The stock has a beta of 2.19 and a short float of 3.6% with 5.56 days to cover. Shares are up 7.3% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Tiffany as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, good cash flow from operations, increase in net income and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.3%. Since the same quarter one year prior, revenues rose by 13.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for TIFFANY & CO is rather high; currently it is at 63.17%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 12.41% is above that of the industry average.
  • Net operating cash flow has significantly increased by 3255.93% to $76.62 million when compared to the same quarter last year. In addition, TIFFANY & CO has also vastly surpassed the industry average cash flow growth rate of -4.38%.
  • 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 50.3% when compared to the same quarter one year prior, rising from $83.58 million to $125.61 million.
  • The current debt-to-equity ratio, 0.35, 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 0.90 is somewhat weak and could be cause for future problems.

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