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Trade-Ideas LLC identified

Solera Holdings

(

SLH

) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Solera Holdings as such a stock due to the following factors:

  • SLH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $216.6 million.
  • SLH traded 23,500 shares today in the pre-market hours as of 8:06 AM.
  • SLH is down 2% today from Friday's close.

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More details on SLH:

Solera Holdings, Inc. provides risk and asset management software and services to the automotive and property marketplace. The stock currently has a dividend yield of 1.6%. Currently there are 2 analysts that rate Solera Holdings a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for Solera Holdings has been 2.3 million shares per day over the past 30 days. Solera has a market cap of $3.7 billion and is part of the technology sector and computer software & services industry. Shares are up 8% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Solera Holdings as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally high debt management risk and feeble growth in its earnings per share.

Highlights from the ratings report include:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 1775.9% when compared to the same quarter one year ago, falling from $8.76 million to -$146.79 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Software industry and the overall market, SOLERA HOLDINGS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The debt-to-equity ratio is very high at 10.89 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, SLH has managed to keep a strong quick ratio of 1.96, which demonstrates the ability to cover short-term cash needs.
  • SOLERA HOLDINGS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, SOLERA HOLDINGS INC reported poor results of -$1.52 versus -$0.13 in the prior year. This year, the market expects an improvement in earnings ($2.97 versus -$1.52).
  • After a year of stock price fluctuations, the net result is that SLH's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

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