One of the standouts of today's morning trading session was DAVIDsTEA, which logged a 5.18% performance and outperformed the S&P 500 by 4.48%. The Packaged Foods stock is now trading at $0.81 per share and may still have upside potential because it is still -76.73% under its average target price of $3.48.
It seems the market sentiment regarding DAVIDsTEA is mostly optimistic, since it has a short interest of only 0.13%. This is the percentage of the share float that is being shorted by investors who are hoping the stock's price will decrease in the future.
Short selling involves borrowing shares and then selling them at current market prices. In the successful version of the strategy, the shares are purchased at a lower price at some time in the future. The investor then returns the shares to the lender, and keeps the profit made on the sell/buy transaction.
A possible indicator of market sentiment on a stock (besides its share price, of course) is the portion of institutional investors that make up its shareholders. Institutions such as banks, hedge funds, and wealth managers deploy significant resources towards identifying good investments. If they are invested heavily in a given company's stock, it could mean it's a good investment. Or it could mean the company is being targeted by a takeover attempt.
For what it's worth, institutions own 12.45% of DAVIDsTEA's shares, which is an average amount. It means that many institutions are invested, but not to the extent that they would be in a stock such as Apple or Amazon, whose institutional ownership rates hover around 60%. Bear in mind that institutional ownership is just one piece of the puzzle in determining market sentiment, and you should not consider this factor alone in making an investment decision.
Overall, there is negative market sentiment on DAVIDsTEA because its an analyst consensus of strong upside potential, no average rating visible in our data, no information on the number of shares sold short, and no information on the number of institutional investors. Warren Buffett famously said that in the short term, markets are voting mechanisms, but in the long term, they are weighing mechanisms. This means that long term investors should be aware of a stock's fundamentals before committing.
Buffett was one of the fist investors to focus on free cash flow as a yardstick for a company's health. Here are DTEA's recent cash flows:
| Date Reported | Cash Flow from Operations (k) | Free Cash Flow (k) | YoY Growth |
|---|---|---|---|
| 2022-01-29 | -$4,241 | -$4,241 | 62.37% |
| 2021-01-30 | -$11,269 | -$11,269 | -134.04% |
| 2020-02-01 | $33,108 | $33,108 | 350.29% |
| 2019-02-02 | -$13,228 | -$13,228 | -234.19% |
| 2018-02-03 | $9,858 | $9,858 | n/a |
