Trade-Ideas LLC identified

Advisory Board

(

ABCO

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

  • ABCO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $20.6 million.
  • ABCO has traded 50,287 shares today.
  • ABCO is down 3.6% today.
  • ABCO was up 5.6% yesterday.

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More details on ABCO:

The Advisory Board Company provides best practices research and insight, performance technology software, consulting and management, and data-and tech-enabled services in the United States and internationally. ABCO has a PE ratio of 238. Currently there are 13 analysts that rate Advisory Board a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Advisory Board has been 414,200 shares per day over the past 30 days. Advisory Board has a market cap of $1.9 billion and is part of the services sector and diversified services industry. The stock has a beta of 1.50 and a short float of 10.1% with 8.58 days to cover. Shares are down 2.3% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Advisory Board as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share and increase in net income. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 3.1%. Since the same quarter one year prior, revenues rose by 30.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ADVISORY BOARD CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($1.33 versus $0.17).
  • The debt-to-equity ratio is somewhat low, currently at 0.96, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.96 is somewhat weak and could be cause for future problems.
  • Compared to other companies in the Professional Services industry and the overall market, ADVISORY BOARD CO's return on equity significantly trails that of both the industry average and the S&P 500.
  • ABCO has underperformed the S&P 500 Index, declining 7.43% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

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