Trade-Ideas LLC identified

Advisory Board

(

ABCO

) as a "dead cat bounce" (down big yesterday but up 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 $32.8 million.
  • ABCO has traded 90,375 shares today.
  • ABCO is up 6.6% today.
  • ABCO was down 27% 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 194. Currently there are 17 analysts that rate Advisory Board a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Advisory Board has been 255,300 shares per day over the past 30 days. Advisory Board has a market cap of $1.5 billion and is part of the services sector and diversified services industry. The stock has a beta of 1.05 and a short float of 8.8% with 2.72 days to cover. Shares are down 26.9% year-to-date as of the close of trading on Tuesday.

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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, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 3.3%. Since the same quarter one year prior, revenues rose by 38.8%. 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.
  • 48.85% is the gross profit margin for ADVISORY BOARD CO which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 0.92% trails the industry average.
  • 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.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 29.88%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 77.77% compared to the year-earlier quarter. 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.
  • 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 Professional Services industry. The net income has significantly decreased by 71.4% when compared to the same quarter one year ago, falling from $6.49 million to $1.86 million.

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