Trade-Ideas: TAL Education Group (XRS) Is Today's Strong And Under The Radar Stock
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 TAL Education Group as such a stock due to the following factors:
- XRS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $10.0 million.
- XRS is making at least a new 3-day high.
- XRS has a PE ratio of 36.0.
- XRS is mentioned 1.77 times per day on StockTwits.
- XRS has not yet been mentioned on StockTwits today.
- XRS is currently in the upper 20% of its 1-year range.
- XRS is in the upper 35% of its 20-day range.
- XRS is in the upper 45% of its 5-day range.
- XRS 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 XRS:
TAL Education Group, together with its subsidiaries, provides K-12 after-school tutoring services under the Xueersi brand name in China. XRS has a PE ratio of 36.0. Currently there are 3 analysts that rate TAL Education Group a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for TAL Education Group has been 409,300 shares per day over the past 30 days. TAL Education Group has a market cap of $2.6 billion and is part of the services sector and diversified services industry. Shares are up 17.3% year-to-date as of the close of trading on Thursday.
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Analysis:
rates TAL Education Group as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, notable return on equity, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 10.3%. Since the same quarter one year prior, revenues rose by 35.1%. 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.
- Compared to its closing price of one year ago, XRS's share price has jumped by 29.25%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- TAL EDUCATION GROUP's earnings per share declined by 13.3% 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, TAL EDUCATION GROUP increased its bottom line by earning $0.75 versus $0.43 in the prior year. This year, the market expects an improvement in earnings ($0.99 versus $0.75).
- 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. Compared to other companies in the Diversified Consumer Services industry and the overall market on the basis of return on equity, TAL EDUCATION GROUP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- The gross profit margin for TAL EDUCATION GROUP is rather high; currently it is at 50.73%. Regardless of XRS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, XRS's net profit margin of 11.02% is significantly lower than the industry average.
- You can view the full TAL Education Group Ratings Report.
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