Elizabeth Arden (RDEN) Showing Signs Of Perilous Reversal 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 Elizabeth Arden ( RDEN) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Elizabeth Arden as such a stock due to the following factors:

  • RDEN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $24.5 million.
  • RDEN has traded 111,477 shares today.
  • RDEN is down 3.2% today.
  • RDEN was up 11.1% yesterday.

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More details on RDEN:

Elizabeth Arden, Inc., a beauty products company, engages in the manufacture, distribution, marketing, and sale of fragrances, skin care, and cosmetic products worldwide. Currently there is 1 analyst that rates Elizabeth Arden a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Elizabeth Arden has been 598,400 shares per day over the past 30 days. Elizabeth Arden has a market cap of $447.1 million and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 1.18 and a short float of 7.7% with 1.50 days to cover. Shares are down 52.8% 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 Elizabeth Arden as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Personal Products industry. The net income has significantly decreased by 3013.1% when compared to the same quarter one year ago, falling from -$5.01 million to -$155.94 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Personal Products industry and the overall market, ELIZABETH ARDEN INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$2.98 million or 104.20% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 57.07%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 2982.35% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • ELIZABETH ARDEN INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ELIZABETH ARDEN INC swung to a loss, reporting -$4.91 versus $1.33 in the prior year. This year, the market expects an improvement in earnings ($0.89 versus -$4.91).

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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