RetailerChico's FAS (
CHS
) may have dropped off the radar for many growth investors for
some time, but the stock is now showing some positive attributes
as a new base forms.
The stock is in a 10-week-old consolidation with a 16.17
potential buy point. Chico's shares corrected 16% vs. 42% for a
base that ran from July 2011 to April.
Unlike its prior pattern, which showed some wide-and-loose
action, trading in the current structure is much tighter.
Chico's has also showed signs of professional buying. The
stock's Accumulation-Distribution Rating has improved to B+ from
C last month. Its up-down volume ratio has climbed to 1.4 from
1.1 three weeks ago. Readings above 1.0 signal positive
demand.
The Pittsburgh, Pa.-based firm runs its namesake Chico's
women's boutiques, as well as White House-Black Market, Soma
Intimates and Boston Proper stores.
Chico's has been on the comeback trail after some rough times.
After earning $1.06 a share in the fiscal 2005, which ended in
January 2006, its profits weakened more and it posted a loss in
fiscal 2008. But the company has been profitable each year since
then. In the latest fiscal year, it earned 84 cents a share.
Because Chico's earnings performance was volatile in much of
2007-09, its Earnings Stability Factor is low. But EPS gains have
been steady since 2010.
The company in May reported that profit rose 23% to 32 cents a
share in the April-ended quarter. Revenue grew 21% to $650.8
million, the second straight quarter of accelerating growth.
Analysts polled by Thomson Reuters see earning rising 24% to
$1.04 a share this year. The estimate was recently revised
higher.
Chico's is a relative newcomer to paying dividends. It started
in March 2010, paying 4 cents a share per quarter. The company
has raised its payout twice. It currently pays 5.25 cents a share
per quarter, or 21 cents on an annualized basis.
The dividend has a yield of about 1.4%, which is on the low
end of Chico's dividend-paying peers. But Chico's has a Composite
Rating of 98, one of the highest in the apparel-store industry
group.