Trade-Ideas: Williams-Sonoma (WSM) 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 Williams-Sonoma ( WSM) as a post-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified Williams-Sonoma as such a stock due to the following factors:

  • WSM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $60.8 million.
  • WSM is up 3.6% today from today's close.

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More details on WSM:

Williams-Sonoma Inc. operates as a multi-channel specialty retailer of home products. The company operates in two segments, E-commerce and Retail. The stock currently has a dividend yield of 1.8%. WSM has a PE ratio of 24. Currently there are 7 analysts that rate Williams-Sonoma a buy, no analysts rate it a sell, and 15 rate it a hold.

The average volume for Williams-Sonoma has been 843,200 shares per day over the past 30 days. Williams-Sonoma has a market cap of $7.2 billion and is part of the services sector and retail industry. The stock has a beta of 0.88 and a short float of 3.6% with 4.37 days to cover. Shares are up 3.4% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Williams-Sonoma as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, solid stock price performance, largely solid financial position with reasonable debt levels by most measures and notable return on equity. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.1%. Since the same quarter one year prior, revenues slightly increased by 5.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • WILLIAMS-SONOMA INC has improved earnings per share by 13.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, WILLIAMS-SONOMA INC increased its bottom line by earning $3.26 versus $2.85 in the prior year. This year, the market expects an improvement in earnings ($3.45 versus $3.26).
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • WSM's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.33 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • 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. In comparison to other companies in the Specialty Retail industry and the overall market on the basis of return on equity, WILLIAMS-SONOMA INC has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.

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