Strong And Under The Radar: Stewart Information Services (STC)
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 Stewart Information Services as such a stock due to the following factors:
- STC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.4 million.
- STC is making at least a new 3-day high.
- STC has a PE ratio of 30.4.
- STC is mentioned 0.94 times per day on StockTwits.
- STC has not yet been mentioned on StockTwits today.
- STC is currently in the upper 20% of its 1-year range.
- STC is in the upper 35% of its 20-day range.
- STC is in the upper 45% of its 5-day range.
- STC 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 STC:
Stewart Information Services Corporation provides title insurance and real estate services worldwide. The stock currently has a dividend yield of 0.3%. STC has a PE ratio of 30.4. Currently there are no analysts that rate Stewart Information Services a buy, no analysts rate it a sell, and 2 rate it a hold.
The average volume for Stewart Information Services has been 113,500 shares per day over the past 30 days. Stewart Information Services has a market cap of $867.6 million and is part of the financial sector and insurance industry. The stock has a beta of 1.20 and a short float of 2.6% with 4.76 days to cover. Shares are up 1.2% year-to-date as of the close of trading on Monday.
Analysis:
rates Stewart Information Services as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 20.8%. Since the same quarter one year prior, revenues rose by 16.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- STC's debt-to-equity ratio is very low at 0.09 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
- Net operating cash flow has significantly increased by 133.91% to $38.22 million when compared to the same quarter last year. In addition, STEWART INFORMATION SERVICES has also vastly surpassed the industry average cash flow growth rate of -44.33%.
- STEWART INFORMATION SERVICES's earnings per share declined by 31.9% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, STEWART INFORMATION SERVICES reported lower earnings of $1.19 versus $2.59 in the prior year. This year, the market expects an improvement in earnings ($2.67 versus $1.19).
- The gross profit margin for STEWART INFORMATION SERVICES is currently extremely low, coming in at 7.62%. Regardless of STC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.27% trails the industry average.
- You can view the full Stewart Information Services Ratings Report.
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