Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

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 $24.9 million.
  • ABCO has traded 196,566 shares today.
  • ABCO is up 3.6% today.
  • ABCO was down 20.8% 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 349. Currently there are 14 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 325,200 shares per day over the past 30 days. Advisory Board has a market cap of $2.5 billion and is part of the services sector and diversified services industry. The stock has a beta of 1.20 and a short float of 8.7% with 6.40 days to cover. Shares are down 4.1% year-to-date as of the close of trading on Wednesday.

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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, solid stock price performance and growth in earnings per share. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 5.0%. 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.
  • Powered by its strong earnings growth of 322.22% and other important driving factors, this stock has surged by 26.59% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although ABCO had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • 49.29% 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 4.71% trails the industry average.
  • The debt-to-equity ratio is somewhat low, currently at 0.95, 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.

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