Trade-Ideas: CDK Global (CDK) Is Today's New Lifetime High Stock

Trade-Ideas LLC identified CDK Global (CDK) as a new lifetime high candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

CDK Global

(

CDK

) as a new lifetime high 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 $45.9 million.
  • CDK has traded 13,617 shares today.
  • CDK is trading at a new lifetime high.

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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 0.9%. CDK has a PE ratio of 41. 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 899,300 shares per day over the past 30 days. CDK Global has a market cap of $8.9 billion and is part of the technology sector and computer software & services industry. Shares are up 21.7% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates CDK Global as a

hold

. 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 also find weaknesses including unimpressive growth in net income and generally higher debt management risk.

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 22.64%.
  • 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, despite the company's weak earnings results. 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 Software industry average, but is less than that of the S&P 500. 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.

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