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 or Stephanie Link.

Trade-Ideas LLC identified

iGATE Corporation

(

TST Recommends

IGTE

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified iGATE Corporation as such a stock due to the following factors:

  • IGTE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.6 million.
  • IGTE has traded 348,169 shares today.
  • IGTE is down 3.4% today.
  • IGTE was up 16.4% yesterday.

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More details on IGTE:

iGATE Corporation, through its subsidiaries, provides information technology (IT) and IT-enabled operations, and offshore outsourcing solutions and services to large and medium-size organizations. IGTE has a PE ratio of 27.9. Currently there are 2 analysts that rate iGATE Corporation a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for iGATE Corporation has been 324,300 shares per day over the past 30 days. iGATE has a market cap of $2.0 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.84 and a short float of 1.9% with 1.40 days to cover. Shares are down 3.8% year-to-date as of the close of trading on Thursday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates iGATE Corporation as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, reasonable valuation levels, solid stock price performance and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 20.4%. Since the same quarter one year prior, revenues rose by 10.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • IGATE CORP has improved earnings per share by 5.1% 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 two years. We feel that this trend should continue. During the past fiscal year, IGATE CORP increased its bottom line by earning $1.65 versus $1.12 in the prior year. This year, the market expects an improvement in earnings ($1.90 versus $1.65).
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 77.57% over the past year, a rise that has exceeded that of the S&P 500 Index. 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.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the IT Services industry and the overall market on the basis of return on equity, IGATE CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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