Trade-Ideas LLC identified

HMS Holdings

(

HMSY

) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified HMS Holdings as such a stock due to the following factors:

  • HMSY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $20.7 million.
  • HMSY has traded 850,626 shares today.
  • HMSY traded in a range 276.9% of the normal price range with a price range of $1.64.
  • HMSY traded above its daily resistance level (quality: 20 days, meaning that the stock is crossing a resistance level set by the last 20 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in HMSY with the Ticky from Trade-Ideas. See the FREE profile for HMSY NOW at Trade-Ideas

More details on HMSY:

HMS Holdings Corp., through its subsidiaries, provides healthcare insurance benefit cost containment services in the United States. HMSY has a PE ratio of 62. Currently there are 7 analysts that rate HMS Holdings a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for HMS Holdings has been 2.0 million shares per day over the past 30 days. HMS has a market cap of $843.9 million and is part of the services sector and diversified services industry. The stock has a beta of 0.98 and a short float of 11.2% with 4.66 days to cover. Shares are down 58.2% year-to-date as of the close of trading on Friday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates HMS Holdings as a

hold

. 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 reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:

  • The revenue growth significantly trails the industry average of 35.3%. Since the same quarter one year prior, revenues slightly increased by 3.9%. 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.
  • The current debt-to-equity ratio, 0.36, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 4.28, which clearly demonstrates the ability to cover short-term cash needs.
  • 38.94% is the gross profit margin for HMS HOLDINGS CORP which we consider to be strong. Regardless of HMSY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.63% trails the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Health Care Technology industry average, but is greater than that of the S&P 500. The net income has decreased by 10.3% when compared to the same quarter one year ago, dropping from $6.04 million to $5.42 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Health Care Technology industry and the overall market on the basis of return on equity, HMS HOLDINGS CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.