This Discount Retailer is Poised for a Rally
The early indications from holiday retail sales numbers are showing that retailers had a very merry Christmas, but the results did vary from one segment to another. According to the Mastercard SpendingPulse report, retail sales were up 5.1% from December 1 through 24 compared to the same period one year ago.
There were interesting pockets where sales increased and decreased. Home improvement sales were up 9% while electronics were down 0.7%. Another area that saw a big increase was apparel with a gain of 7.9%.
Enter Ross Stores (Nasdaq: ROST) -- a company I have been watching for quite some time. The stock pulled back in the last few months, but it found support just above its 104-week moving average.
The stock was tremendously oversold based on the weekly stochastic readings. The readings were the lowest they had been since July ’17 before turning higher in the last two weeks. When the stochastic readings made a bullish crossover in ’17, the stock rallied over 50% in the next six months.
The company has seen its earnings grow at a solid pace in recent years. The EPS growth rate has averaged 18% annually over the last three years and analysts expect earnings growth of 25% in the current year.
I don’t know that we will see a 50% jump in the stock over the next six months, but I certainly expect the stock to rally.
ROST in upward trend: price may jump up because it broke its lower Bollinger Band on April 03, 2024
ROST may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options. In of 41 cases where ROST's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Indicator shows that the ticker has stayed in the oversold zone for 4 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an Uptrend is expected.
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 11 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where ROST advanced for three days, in of 351 cases, the price rose further within the following month. The odds of a continued upward trend are .
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on April 01, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on ROST as a result. In of 94 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
ROST moved below its 50-day moving average on April 02, 2024 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for ROST crossed bearishly below the 50-day moving average on April 04, 2024. This indicates that the trend has shifted lower and could be considered a sell signal. In of 17 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where ROST declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for ROST entered a downward trend on April 12, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 78, placing this stock slightly better than average.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. ROST’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: ROST's P/B Ratio (10.020) is slightly higher than the industry average of (3.862). P/E Ratio (26.088) is within average values for comparable stocks, (100.955). ROST's Projected Growth (PEG Ratio) (2.444) is slightly higher than the industry average of (1.444). Dividend Yield (0.009) settles around the average of (0.027) among similar stocks. P/S Ratio (2.402) is also within normal values, averaging (2.003).
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Fundamental Analysis Ratings
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General Information
an operator of discount clothing chains & sells closeout merchandise
Industry ApparelFootwearRetail