Trade-Ideas LLC identified Jack In The Box ( JACK) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Jack In The Box as such a stock due to the following factors:

  • JACK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $66.8 million.
  • JACK has traded 314,706 shares today.
  • JACK traded in a range 228.5% of the normal price range with a price range of $5.99.
  • JACK traded below its daily resistance level (quality: 10 days, meaning that the stock is crossing a resistance level set by the last 10 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on JACK:

Jack in the Box Inc. operates and franchises Jack in the Box quick-service restaurants and Qdoba Mexican Eats fast-casual restaurants primarily in the United States. The stock currently has a dividend yield of 1.5%. JACK has a PE ratio of 26. Currently there are 5 analysts that rate Jack In The Box a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Jack In The Box has been 719,300 shares per day over the past 30 days. Jack In The Box has a market cap of $2.7 billion and is part of the services sector and leisure industry. The stock has a beta of 0.78 and a short float of 8.5% with 3.33 days to cover. Shares are down 1.5% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Jack In The Box as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • JACK's revenue growth has slightly outpaced the industry average of 1.2%. Since the same quarter one year prior, revenues slightly increased by 2.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • JACK IN THE BOX INC has improved earnings per share by 47.7% 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. This trend suggests that the performance of the business is improving. During the past fiscal year, JACK IN THE BOX INC increased its bottom line by earning $2.95 versus $2.26 in the prior year. This year, the market expects an improvement in earnings ($3.64 versus $2.95).
  • Net operating cash flow has decreased to $61.73 million or 29.12% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The debt-to-equity ratio is very high at 44.84 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.29, which clearly demonstrates the inability to cover short-term cash needs.

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