Trade-Ideas LLC identified

HMS Holdings

(

HMSY

) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified HMS Holdings as such a stock due to the following factors:

  • HMSY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $11.9 million.
  • HMSY has traded 99,100 shares today.
  • HMSY is trading at 3.47 times the normal volume for the stock at this time of day.
  • HMSY is trading at a new high 4.02% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on HMSY:

HMS Holdings Corp., through its subsidiaries, provides healthcare insurance benefit cost containment services in the United States. HMSY has a PE ratio of 79. Currently there are 7 analysts that rate HMS Holdings a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for HMS Holdings has been 1.1 million shares per day over the past 30 days. HMS has a market cap of $1.0 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 9.4% with 8.38 days to cover. Shares are down 44.6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates HMS Holdings as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • HMSY's revenue growth trails the industry average of 27.8%. Since the same quarter one year prior, revenues slightly increased by 4.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • The current debt-to-equity ratio, 0.37, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 3.86, which clearly demonstrates the ability to cover short-term cash needs.
  • 39.44% is the gross profit margin for HMS HOLDINGS CORP which we consider to be strong. Regardless of HMSY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.79% trails the industry average.
  • Net operating cash flow has decreased to $20.36 million or 36.85% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Health Care Technology industry and the overall market on the basis of return on equity, HMS HOLDINGS CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.

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