Wednesday, October 5, 2016

You May Want To Consider Buying This Stock

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LAD $93.6000 2.6600 % 2.9300 Lithia Motors
Sector : Retail-Wholesale Industry : Retail - Wsale Auto
  • Signal
  • Short Term Trend
  • Long Term Trend
  • BUY
  • UP
  • DOWN
Day:2.93% Wk:0.44% Mo:13.08% Yrly:-13.42% YTD:-12.25%
Strength Rank:34 DIV%:1.1 PE:12.45 EPS:1.96 ROE:23.42%
Ann EPS Gro:7.28% Last QTR EPS Gro: 26.45% Sales Gro QTR: 7.59%
Beta:2.13 Mkt Cap:2B Volume:0.58M Book Value:31.59 Ex:NYSE

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Long Term Trend

The long term trend of Lithia Motors is DOWN indicating that LAD has experienced a DOWN trend for at least the past 180 trading days. Long term trends are key to understanding the starting point to the path of least resistance of a stocks price trend. The expected future trend bias is always strongest with the current trend.

Short Term Trend

The short term trend of Lithia Motors is UP, LAD has been undergoing a short term UP UP over the past 7-10 days.

Signal

The current signal for Lithia Motors is BUY indicating that the stock could be Advancing in its trend. The current price trend is not Extreme. Stocks in extreme levels of price trend should be allowed to move out of the extreme range before a buy or sell decision should be made. As is the case for most trending momentum style stocks, much of the &#34reason&#34 price action is not often known until well into the price trend. But earnings growth and management efficiency are key components to a foundation to a sustainable uptrend. We will focus on fundamental indications that can build a case for reasons why the stock should continue its current trend.

Strength Rank

Rank is the rank of the stock vs. its peers. For example a Rank of 98 means the stock is out performing 98% of its peers over a 12 month period. A rank of 2 means the stock is outperforming 2% of its peers, in other words, 98% of its peers are out performing it. 98 is good, 2 is not so good. The current quarter is 40% of the weighting, so current performance is more significant to the rank.

The current rank for Lithia Motors is 34, this means that LAD is out performing 34% of its peers. Stocks that have a rank of 80 or better, with support of all other analyses shown here, tend to advance the trend.

The 90 day trend of Rank

ROE - Return on equity is a measure of financial efficiency, gauging how much profit a company is able to generate from the company&#39s financial net worth (that is, assets minus liabilities). Look for an annual return on equity of at least 20%. That is the level that set apart the winning stocks from the ordinary. That doesn&#39t always mean that a company with smaller ROE is a poor investment. Some big winners have of course been shy of 20% return on equity when they started their major up trends. When ROE is strong, it gives investors an indication that the company is better poised to continue a solid earnings performance. A high ROE is only part of the fundamentals a solid company should have. Superb earnings and sales growth, superior profit margins and big operating cash flow are other key elements investors must seek.

The Current ROE for Lithia Motors is 23.42%, indicating LAD is currently functioning with High financial efficiency.

The 12 month chart trend of ROE
Annual EPS Growth - Companies with annual earnings growth of more than 20% are more likely to become leaders in up trending markets. While 20% Annual EPS growth is the minimum you should look for, don't be afraid to seek even better results. Studies have shown that the greatest winners in the past 30 years had an average 30% annual EPS growth rate when they started their strong up trends. You also can look for three straight years of rising EPS growth, with an average of at least 25%. These performance results often imply that a company is growing fast even if the general economy is slowing down or even in recession.

The current Annual EPS Growth for Lithia Motors is 7.28% which is less than the 30% average found is strong trending, fundamentally sound companies.

The 12 month chart trend of Annual EPS Growth
Quarterly EPS Growth - Outstanding earnings growth in the most recent quarters can be the single most important trait that identifies winners before they start their major price advances. Generally, the bigger the earnings growth, the better. Specifically, look for a company's earnings per share up at least 25-30% vs. the year-ago level in the most recent quarter or two. Gains of 50%, 100% or more are typical of strong market leaders even before they make their huge price moves. There's really nothing magic about this connection. Successful companies generate the strongest profit gains, regardless of the economic cycle. Even during periods when corporate profits are weak in general, you still find standouts that achieve massive earnings growth.

The current Quarterly EPS Growth for Lithia Motors is 26.45% which is greater than the 25% average found is strong trending stocks even during or before huge price moves.

The 12 month chart trend of Quarterly EPS Growth
Quarterly Sales growth - A company's annual and quarterly rate of increase in revenues (sales). A measure of growth and success as long as it is accompanied by an equally strong rate of increase in earnings per share. You want to see both in a potential investment. A company's quarterly EPS gain should be supported by an increase in revenue (sales) of at least 25% or at least by an acceleration in sales growth in the past few quarters. You also should watch out for earnings growth that comes amid falling sales. Companies with declining revenue often boost their EPS results through layoffs or other cost cuts, especially in an uncertain economic environment. But this isn't a sustainable approach, and it's definitely not as desirable as profit gains that come from higher revenue. Recent quarterly sales results are more critical when it comes to researching stocks.

The current Quarterly Sales Growth for Lithia Motors is 7.59% which is less than the 25% average found is strong trending stocks.

The 12 month chart trend of Quarterly Sales Growth

Dividend Yield

Dividend yield is the annual dividend income per share received from a company divided by its current share price. Normally investors would like to see a dividend yield between 2% and 20% for a dividend paying company. The dividend yield is an important factor to consider when investing in dividend paying stocks. Dividend yield is a financial ratio that reflects the % of profits a company makes of the dividend payments over the course of a year. For example if a stock pays an annual dividend of $2 and is trading at $50 a share, it would have a dividend yield of 4%.

The current Dividend Yield for Lithia Motors is 1.1%.


Stocks Historical Trading Characteristics.


           Trade Stats for   LAD

Number of Trades 6 Trade Expectancy $-111.52
Total Profit Amount $1040.83 Trade Expectancy% -1.12%
Total Loss Amount $1805.87 Annual Trade Expectancy $-557.62
Net Profit/Loss $-765.04 Annual Trade Expectancy% -5.58%
Avg Profit on Winners $346.94 Largest Profit $830.75
Avg Loss on Losers $601.96 Largest Loss $968.77
Total Net % Gain or Loss -7.65% Avg Days in Trade 30
Avg % Gain on Winners 4.08% Avg Days between Trades 44
Avg % Loss on Losers 6.31% Longest nbr of consecutive Winners 2
Reward to Risk Ratio 0.65 Longest nbr of consecutive Losers 2
Number of Trades Per Year 5 Largest Drawdown -16.75%
Number of Winners 3 Avg Drawdown -11.26%
Number of Losers 3
Winning Percentage% 50.00%



Backtesting a stock can provide investors with critical statistical data. These results give you an informed perspective on how a stock trades within your chosen buying and selling method of analysis. The definition of trade expectancy is defined as: trade expectancy = (probability of win * average win) - (probability of loss * average loss). If the calculation returns a positive number, a trader should make money over time.

The average percentage gained on positive, money making trades was 4.08%. While the average percent loss on money losing trades was 6.31%.

Trade expectancy includes both winners and losers. Trade expectancy is displayed as a percentage. This backtest displays the dollar value, percentage, annual trade expectancy, and annual percent. Annual expectancy is the trade expectancy percentage multiplied by the number of trades per year.

The Trade expectancy % for LAD over the past year is -1.12%. The number of trades generated per year was 5 giving an Annual Trade Expectancy of -5.58%

The average days in a trade is 30 and the average days between trades is 44.

With any method of analysis that uses past performance, it can be said that past performance is not indication of future performance. What is does provide is a probabilistic look at a stock's price activity characteristics over time.



The historical Profit and loss curve of a $10,000 shows
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