Trade-Ideas: Citi Trends (CTRN) Is Today's Strong And Under The Radar 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 Citi Trends ( CTRN) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Citi Trends as such a stock due to the following factors:

  • CTRN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.3 million.
  • CTRN is making at least a new 3-day high.
  • CTRN has a PE ratio of 43.
  • CTRN is mentioned 1.03 times per day on StockTwits.
  • CTRN has not yet been mentioned on StockTwits today.
  • CTRN is currently in the upper 20% of its 1-year range.
  • CTRN is in the upper 35% of its 20-day range.
  • CTRN is in the upper 45% of its 5-day range.
  • CTRN is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on CTRN:

Citi Trends, Inc. operates as a retailer of urban fashion apparel and accessories. CTRN has a PE ratio of 43. Currently there is 1 analyst that rates Citi Trends a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Citi Trends has been 170,500 shares per day over the past 30 days. Citi Trends has a market cap of $404.0 million and is part of the services sector and retail industry. The stock has a beta of 0.58 and a short float of 2.1% with 2.69 days to cover. Shares are up 3.9% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Citi Trends as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • CITI TRENDS INC has improved earnings per share by 21.3% 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, CITI TRENDS INC increased its bottom line by earning $0.60 versus $0.04 in the prior year. This year, the market expects an improvement in earnings ($1.00 versus $0.60).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Specialty Retail industry average. The net income increased by 24.2% when compared to the same quarter one year prior, going from $9.08 million to $11.28 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.1%. Since the same quarter one year prior, revenues slightly increased by 3.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CTRN has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign.
  • 39.71% is the gross profit margin for CITI TRENDS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 5.78% trails the industry average.

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