Rollins (ROL) Highlighted As Strong And Under The Radar Stock Of The Day
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
(
) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Rollins as such a stock due to the following factors:
- ROL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.8 million.
- ROL is making at least a new 3-day high.
- ROL has a PE ratio of 35.8.
- ROL is mentioned 1.19 times per day on StockTwits.
- ROL has not yet been mentioned on StockTwits today.
- ROL is currently in the upper 20% of its 1-year range.
- ROL is in the upper 35% of its 20-day range.
- ROL is in the upper 45% of its 5-day range.
- ROL 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 ROL:
Rollins, Inc., through its subsidiaries, provides pest and termite control services to residential and commercial customers. The stock currently has a dividend yield of 1.4%. ROL has a PE ratio of 35.8. Currently there is 1 analyst that rates Rollins a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for Rollins has been 147,300 shares per day over the past 30 days. Rollins has a market cap of $4.9 billion and is part of the services sector and diversified services industry. The stock has a beta of 0.74 and a short float of 1.5% with 6.75 days to cover. Shares are up 1.3% year-to-date as of the close of trading on Friday.
Analysis:
rates Rollins as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.
Highlights from the ratings report include:
- ROL's revenue growth has slightly outpaced the industry average of 3.0%. Since the same quarter one year prior, revenues slightly increased by 5.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Commercial Services & Supplies industry and the overall market, ROLLINS INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- 49.13% is the gross profit margin for ROLLINS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 8.69% trails the industry average.
- ROL has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.79 is somewhat weak and could be cause for future problems.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full Rollins Ratings Report.
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