Trade-Ideas LLC identified Iconix Brand Group ( ICON) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Iconix Brand Group as such a stock due to the following factors:

  • ICON has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $19.6 million.
  • ICON has traded 253,627 shares today.
  • ICON is down 3.3% today.
  • ICON was up 8.3% yesterday.

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More details on ICON:

Iconix Brand Group, Inc., a brand management company, owns, licenses, and markets a portfolio of consumer brands across women's, men's, entertainment, and home primarily in the United States and internationally. ICON has a PE ratio of 3. Currently there is 1 analyst that rates Iconix Brand Group a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Iconix Brand Group has been 3.1 million shares per day over the past 30 days. Iconix Brand Group has a market cap of $243.9 million and is part of the consumer goods sector and consumer non-durables industry. The stock has a beta of 2.25 and a short float of 36.3% with 3.51 days to cover. Shares are down 20.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Iconix Brand Group as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry. The net income has significantly decreased by 118.8% when compared to the same quarter one year ago, falling from $33.68 million to -$6.34 million.
  • Currently the debt-to-equity ratio of 1.53 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, ICON maintains a poor quick ratio of 0.76, which illustrates the inability to avoid short-term cash problems.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, ICONIX BRAND GROUP INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 83.74%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 122.41% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • ICONIX BRAND GROUP INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ICONIX BRAND GROUP INC increased its bottom line by earning $2.58 versus $2.11 in the prior year. For the next year, the market is expecting a contraction of 47.1% in earnings ($1.37 versus $2.58).

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