Trade-Ideas LLC identified

Total System Services

(

TSS

) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Total System Services as such a stock due to the following factors:

  • TSS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $41.5 million.
  • TSS has traded 81,815 shares today.
  • TSS traded in a range 226.9% of the normal price range with a price range of $1.53.
  • TSS traded below its daily resistance level (quality: 19 days, meaning that the stock is crossing a resistance level set by the last 19 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on TSS:

Total System Services, Inc. provides payment processing, merchant, and related payment services to financial and nonfinancial institutions in the United States, Europe, Canada, Mexico, and internationally. The stock currently has a dividend yield of 0.7%. TSS has a PE ratio of 27. Currently there are 6 analysts that rate Total System Services a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Total System Services has been 1.2 million shares per day over the past 30 days. Total System Services has a market cap of $10.2 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.28 and a short float of 1.4% with 3.25 days to cover. Shares are up 12.3% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Total System Services as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, increase in net income and expanding profit margins. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues rose by 11.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • TOTAL SYSTEM SERVICES INC has improved earnings per share by 16.7% 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, TOTAL SYSTEM SERVICES INC increased its bottom line by earning $1.96 versus $1.46 in the prior year. This year, the market expects an improvement in earnings ($2.83 versus $1.96).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the IT Services industry average. The net income increased by 16.6% when compared to the same quarter one year prior, going from $77.76 million to $90.63 million.
  • 44.15% is the gross profit margin for TOTAL SYSTEM SERVICES INC 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 12.25% trails the industry average.

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