Taking a look at a recent 8-K SEC filing, we can see the over holiday numbers which are a good indication of where the company may be headed. Net sales were reported to be up 1 percent and comparable sales were positive 2 percent for the November and December 2016 holiday season, comparing it to last year. Old Navy Global has the largest percentage gain at 12 percent, compared to a negative 7 percent last year. The other two companies had positive net sales as well. All around good numbers, but it will be interesting to see how it plays into early this year.
Taking a look at the chart, we can see that the chart is creating a head and shoulders pattern, which may not be good for price movement. Take a look at the $22 area as support and watch for that to hold or be broken. The key here is to also watch volume because if it breaks either way on light volume, that means it was not a strong move. All in all the chart is moving in a healthy manner, but just watch out for a break to the down side.
Typically, a company's
financial statements are the reports that show the
financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Gap income statement, its balance sheet, and the statement of cash flows. Potential Gap investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Gap investors may use each financial statement separately, they are all related. The changes in Gap's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Gap's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our
technical analysis and
fundamental analysis pages.
The goal of Gap
fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Gap performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Gap shares is the value that is considered the true value of the share. If
the intrinsic value of Gap is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Gap. Please read more on our
fundamental analysis page.
And What about dividends?
A dividend is the distribution of a portion of Gap earnings, decided and managed by the company's board of directors and paid to a class of its shareholders. Note, announcements of dividend payouts are generally accompanied by a proportional increase or decrease in a company's stock price. Gap dividend payments follow a chronological order of events, and the associated dates are important to determine the shareholders who qualify for receiving the dividend payment. Gap one year expected dividend income is about USD0.4 per share.
Investing in dividend-paying stocks, such as Gap Inc is one of the few strategies that are good for long-term investment. Ex-dividend dates are significant because investors in Gap must own a stock before its ex-dividend date to receive its next dividend.
This type of analysis is very useful when you want to generate a past dividend schedule and payout information for Gap. Then that information in the form of graph and calendar can be used to fully explain how Du Pont dividends can provide a real clue to its valuation.
How important is Gap's Liquidity
Gap
financial leverage refers to using borrowed capital as a funding source to finance Gap Inc ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Gap financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Gap's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Gap's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Gap's total debt and its cash.
Going after Gap Financials
Risks
Taking a look at the most recent 10-K filing, here are a few risks that you should pay close attention to before investing. The company has to successfully gauge apparel trends and changing consumer preferences to succeed. As stated earlier, this is possibly the most important items because if the company cannot supply demand with the latest and greatest, then they will be unable to survive. Also, being aware of the global economic conditions is important because if the economy begins tanking, then people will no longer have extra money to spend on items such as new cloths.
Conclusion
Currently, with retail struggling, this might be a great time to find a hidden gem or two, and Gap, Inc. quite possibly could be one. Be sure to do very detailed research before investing and consult and investing professional as they can point you in the right direction. If you’re still unsure, compare it to other companies to see which one is providing the most value.
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Nathan Young is a Senior Member of Macroaxis Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Nathan Young do not own shares of Gap Inc. Please refer to our
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