Today's Strong And Under The Radar Stock: Healthcare Services Group (HCSG)
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.
Trade-Ideas LLC identified
(
) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Healthcare Services Group as such a stock due to the following factors:
- HCSG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $10.6 million.
- HCSG is making at least a new 3-day high.
- HCSG has a PE ratio of 107.2.
- HCSG is mentioned 0.65 times per day on StockTwits.
- HCSG has not yet been mentioned on StockTwits today.
- HCSG is currently in the upper 20% of its 1-year range.
- HCSG is in the upper 35% of its 20-day range.
- HCSG is in the upper 45% of its 5-day range.
- HCSG 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 HCSG:
Healthcare Services Group, Inc. provides management, administrative, and operating services to the housekeeping, laundry, linen, facility maintenance, and dietary service departments to nursing homes, retirement complexes, rehabilitation centers, and hospitals in the United States. The stock currently has a dividend yield of 2.1%. HCSG has a PE ratio of 107.2. Currently there are 3 analysts that rate Healthcare Services Group a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for Healthcare Services Group has been 306,700 shares per day over the past 30 days. Healthcare Services Group has a market cap of $2.4 billion and is part of the services sector and diversified services industry. The stock has a beta of 0.71 and a short float of 11.6% with 24.68 days to cover. Shares are up 7.7% year-to-date as of the close of trading on Wednesday.
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Analysis:
rates Healthcare Services Group 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, good cash flow from operations, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- HCSG's revenue growth has slightly outpaced the industry average of 2.9%. Since the same quarter one year prior, revenues rose by 12.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- HCSG 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. To add to this, HCSG has a quick ratio of 2.42, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has increased to $34.08 million or 40.32% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -1.47%.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. 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.
- HEALTHCARE SERVICES GROUP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HEALTHCARE SERVICES GROUP reported lower earnings of $0.32 versus $0.69 in the prior year. This year, the market expects an improvement in earnings ($0.98 versus $0.32).
- You can view the full Healthcare Services Group Ratings Report.
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