Trade-Ideas: Fossil Group (FOSL) 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.

Trade-Ideas LLC identified Fossil Group ( FOSL) as a post-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified Fossil Group as such a stock due to the following factors:

  • FOSL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $71.5 million.
  • FOSL is up 2.9% today from today's close.

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More details on FOSL:

Fossil Group, Inc., together with its subsidiaries, designs, develops, markets, and distributes consumer fashion accessories. The company operates through four segments: North America Wholesale, Europe Wholesale, Asia Pacific Wholesale, and Direct to Consumer. FOSL has a PE ratio of 12.0. Currently there are 4 analysts that rate Fossil Group a buy, 4 analysts rate it a sell, and 4 rate it a hold.

The average volume for Fossil Group has been 1.2 million shares per day over the past 30 days. Fossil Group has a market cap of $4.2 billion and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 2.03 and a short float of 17.8% with 10.06 days to cover. Shares are down 23.2% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Fossil Group as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.0%. Since the same quarter one year prior, revenues slightly increased by 0.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, FOSSIL GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • FOSL's debt-to-equity ratio of 0.64 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that FOSL's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.62 is high and demonstrates strong liquidity.
  • FOSL has underperformed the S&P 500 Index, declining 21.26% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Net operating cash flow has decreased to $189.97 million or 18.01% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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