Strong And Under The Radar: WageWorks (WAGE)

Trade-Ideas LLC identified WageWorks (WAGE) as a strong and under the radar candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

WageWorks

(

WAGE

) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified WageWorks as such a stock due to the following factors:

  • WAGE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.5 million.
  • WAGE has traded 6.9551999999999996049382389173842966556549072265625 options contracts today.
  • WAGE is making at least a new 3-day high.
  • WAGE has a PE ratio of 92.
  • WAGE is mentioned 1.10 times per day on StockTwits.
  • WAGE has not yet been mentioned on StockTwits today.
  • WAGE is currently in the upper 20% of its 1-year range.
  • WAGE is in the upper 35% of its 20-day range.
  • WAGE is in the upper 45% of its 5-day range.
  • WAGE 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 WAGE:

WageWorks, Inc. provides consumer-directed benefits (CDBs) for employees to save money on taxes in the United States. WAGE has a PE ratio of 92. Currently there are 6 analysts that rate WageWorks a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for WageWorks has been 244,600 shares per day over the past 30 days. WageWorks has a market cap of $2.1 billion and is part of the services sector and diversified services industry. The stock has a beta of 0.72 and a short float of 4.6% with 6.25 days to cover. Shares are up 29.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates WageWorks as a

buy

. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. We feel its 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:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 5.0%. Since the same quarter one year prior, revenues slightly increased by 2.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • WAGE's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.19, which illustrates the ability to avoid short-term cash problems.
  • WAGEWORKS INC has improved earnings per share by 6.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, WAGEWORKS INC increased its bottom line by earning $0.63 versus $0.50 in the prior year. This year, the market expects an improvement in earnings ($1.41 versus $0.63).
  • Net operating cash flow has significantly increased by 93.23% to $73.49 million when compared to the same quarter last year. In addition, WAGEWORKS INC has also vastly surpassed the industry average cash flow growth rate of 15.22%.
  • The gross profit margin for WAGEWORKS INC is rather high; currently it is at 66.10%. 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 6.66% trails the industry average.

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