Panera Bread (PNRA) Highlighted As Storm The Castle 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 Panera Bread ( PNRA) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Panera Bread as such a stock due to the following factors:

  • PNRA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $74.5 million.
  • PNRA has traded 348,318 shares today.
  • PNRA is trading at 3.87 times the normal volume for the stock at this time of day.
  • PNRA crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on PNRA:

Panera Bread Company, together with its subsidiaries, owns, operates, and franchises retail bakery-cafes in the United States and Canada. The company operates in three segments: Bakery-Cafe Operations, Franchise Operations, and Fresh Dough and Other Product Operations. PNRA has a PE ratio of 23.1. Currently there are 10 analysts that rate Panera Bread a buy, 3 analysts rate it a sell, and 6 rate it a hold.

The average volume for Panera Bread has been 507,900 shares per day over the past 30 days. Panera Bread has a market cap of $4.0 billion and is part of the services sector and leisure industry. The stock has a beta of 1.28 and a short float of 15% with 8.55 days to cover. Shares are down 10.2% year-to-date as of the close of trading on Monday.

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 Panera Bread as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.8%. Since the same quarter one year prior, revenues slightly increased by 7.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has increased to $82.06 million or 27.03% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -4.56%.
  • PNRA's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.88 is somewhat weak and could be cause for future problems.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to other companies in the Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, PANERA BREAD CO has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.

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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