Trade-Ideas LLC identified

Luxoft

(

LXFT

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Luxoft as such a stock due to the following factors:

  • LXFT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.0 million.
  • LXFT has traded 139,683 shares today.
  • LXFT is up 3.1% today.
  • LXFT was down 5.5% yesterday.

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More details on LXFT:

Luxoft Holding, Inc., together with its subsidiaries, provides software development services and IT solutions to multinational corporations primarily in Western Europe and North America. LXFT has a PE ratio of 31. Currently there are 3 analysts that rate Luxoft a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Recommends

The average volume for Luxoft has been 233,900 shares per day over the past 30 days. Luxoft has a market cap of $1.4 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 2.02 and a short float of 3.5% with 3.09 days to cover. Shares are up 80.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Luxoft as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, solid stock price performance, expanding profit margins and compelling growth in net income. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 26.8%. Since the same quarter one year prior, revenues rose by 31.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • LUXOFT HOLDING INC has improved earnings per share by 13.2% 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 year. We feel that this trend should continue. During the past fiscal year, LUXOFT HOLDING INC increased its bottom line by earning $1.92 versus $1.56 in the prior year. This year, the market expects an improvement in earnings ($2.74 versus $1.92).
  • 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 94.08% over the past year, a rise that has exceeded that of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • 40.58% is the gross profit margin for LUXOFT HOLDING INC which we consider to be strong. Regardless of LXFT'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 9.86% trails the industry average.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the IT Services industry average, but is greater than that of the S&P 500. The net income increased by 16.2% when compared to the same quarter one year prior, going from $12.58 million to $14.61 million.

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