Winning SMRT Stock Forecast: Stein Mart Inc. Surpasses Expectations With 87.31% Gain In 1 Month

“Positive spring selling trends have continued into other markets in February as the spring selling season spreads. This gives us confidence that as warmer weather arrives in other parts of the country and spring selling continues to ramp up we will see similar results. We are encouraged by the clear signs that we are off to a good start for the spring season”

-MaryAnne Morin, President of Stein Mart Inc.

(Source: Flickr)

Over the past month from April 15 to May 15, SMRT (Stein Mart) stock has seen a large increase of over 85%. In comparison, NASDAQ composite merely increased by 2.73% from $7,156.30 to $7,351.63 over the same time period. SMRT’s stock price from April 15 to May 15 can be seen in the graph below.

Following low prices in February and March, the stock has begun to bounce back for a number of reasons:

  • Smaller inventories and strong regular-price selling
  • New leadership to take care of problem areas
  • Cost reduction initiatives

As of March, inventories were down to $270 millions compared to $291 million the year before. New inventory policies such as changing delivery flow and markdown practices drove this inventory productivity. This has resulted in strong regular-price selling as well as faster inventory turns. Smaller, healthier inventories reduce the amount of items that need to go on clearance and increase profitability. Additionally, MaryAnne Morin was introduced to the company as president and she is now in charge of merchandising and marketing with a goal of improving this area that was previously problematic for the company. Since joining Stein Mart, Morin has helped to oversee a recalibration of the company’s entire buying process and receipt process, thus helping to increase inventory turn and regular-price selling. Sales on steinmart.com have also gone up from increased TV advertising. Finally, cost cutting strategies have been implemented to increase revenue. SMRT cut many corporate workers and reworked their supply chain in order to be more cost efficient. In 2017, capital expenditure totaled $21 million, a decrease from $42.4 million the year before. Capital expenditure for 2018 is expected to be only $10 million according to the Q4 report. All of these may be factors for the large increase in stock price of SMRT over the time period which coincides with the one month prediction made by the I Know First algorithm. The stock’s success over the predicted time period is indicative of the algorithm’s predictive power.

Current I Know First subscribers received this bullish SMRT forecast on April 15, 2018

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On April 15, the I Know First Algorithm algorithm predicted a signal of 552.33 and predictability of .34 for SMRT for a one month time period as seen on the right. In accordance with this forecast, the stock increased by 87.31% over the given time period, showcasing the algorithm’s predictive power.

 

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How to interpret this diagram

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Stein Mart, Inc. (NASDAQ: SMRT) is a national retailer of merchandise, service, and production of department and special stores located all over the US, but concentrated in the Southeast, particularly  Texas. The company focuses on apparel, accessories, shoes, and home fashions for men and women and its primary target is women over the age of 45. As of March 2018, Stein Mart operates approximately 290 stores across the US as well as an online store that has been gaining traffic. Q1 results for the company will be released on May 23.

Disclaimer

Before making any trading decisions, consult the latest forecast as the algorithm updates predictions daily. You can use the algorithm for intra-day trading. The predictability tends to become stronger with forecasts over longer time-horizons such as the 1-month, 3-month and 1-year forecasts.