Staples (SPLS): Today's Pre-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 Staples ( SPLS) as a pre-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified Staples as such a stock due to the following factors:

  • SPLS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $248.4 million.
  • SPLS traded 241,714 shares today in the pre-market hours as of 7:30 AM.
  • SPLS is up 13.7% today from yesterday's close.

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More details on SPLS:

Staples, Inc., together with its subsidiaries, operates office products superstores. It operates in three segments: North American Stores & Online, North American Commercial, and International Operations. The stock currently has a dividend yield of 3.4%. SPLS has a PE ratio of 15.4. Currently there are no analysts that rate Staples a buy, 2 analysts rate it a sell, and 12 rate it a hold.

The average volume for Staples has been 10.0 million shares per day over the past 30 days. Staples has a market cap of $9.2 billion and is part of the services sector and specialty retail industry. The stock has a beta of 1.85 and a short float of 11.2% with 5.01 days to cover. Shares are down 9% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Staples as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, attractive 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 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 60.3% when compared to the same quarter one year prior, rising from $135.23 million to $216.79 million.
  • Net operating cash flow has increased to $604.60 million or 14.60% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -11.01%.
  • SPLS's debt-to-equity ratio is very low at 0.19 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 0.76 is somewhat weak and could be cause for future problems.
  • SPLS, with its decline in revenue, underperformed when compared the industry average of 8.9%. Since the same quarter one year prior, revenues slightly dropped by 2.5%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.

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