CDK Global (CDK) Is Today's Strong And Under The Radar Stock
Trade-Ideas LLC identified
(
) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified CDK Global as such a stock due to the following factors:
- CDK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $59.3 million.
- CDK has traded 223.52199999999999135980033315718173980712890625 options contracts today.
- CDK is making at least a new 3-day high.
- CDK has a PE ratio of 39.
- CDK is mentioned 1.29 times per day on StockTwits.
- CDK has not yet been mentioned on StockTwits today.
- CDK is currently in the upper 20% of its 1-year range.
- CDK is in the upper 35% of its 20-day range.
- CDK is in the upper 45% of its 5-day range.
- CDK is currently trading above yesterday's high.
'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.
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More details on CDK:
CDK Global, Inc. provides integrated information technology and digital marketing/advertising solutions to the automotive retail industry worldwide. The company operates through three segments: Automotive Retail North America, Automotive Retail International, and Digital Marketing. The stock currently has a dividend yield of 1%. CDK has a PE ratio of 39. Currently there are 2 analysts that rate CDK Global a buy, 1 analyst rates it a sell, and 1 rates it a hold.
The average volume for CDK Global has been 889,200 shares per day over the past 30 days. CDK Global has a market cap of $8.5 billion and is part of the technology sector and computer software & services industry. Shares are up 15.3% year-to-date as of the close of trading on Thursday.
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Analysis:
rates CDK Global as a
. The company's strengths can be seen in multiple areas, such as its notable return on equity, revenue growth and good cash flow from operations. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.
Highlights from the ratings report include:
- Compared to other companies in the Software industry and the overall market, CDK GLOBAL INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has significantly increased by 235.99% to $181.10 million when compared to the same quarter last year. In addition, CDK GLOBAL INC has also vastly surpassed the industry average cash flow growth rate of 22.49%.
- After a year of stock price fluctuations, the net result is that CDK's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and the Software industry average. The net income has decreased by 4.4% when compared to the same quarter one year ago, dropping from $56.30 million to $53.80 million.
- Currently the debt-to-equity ratio of 1.94 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Regardless of the company's weak debt-to-equity ratio, CDK has managed to keep a strong quick ratio of 1.58, which demonstrates the ability to cover short-term cash needs.
- You can view the full CDK Global Ratings Report.
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