Trade-Ideas LLC identified

Ultimate Software Group

(

ULTI

) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Ultimate Software Group as such a stock due to the following factors:

  • ULTI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $57.7 million.
  • ULTI has traded 174.537000000000006139089236967265605926513671875 options contracts today.
  • ULTI is making at least a new 3-day high.
  • ULTI has a PE ratio of 82.
  • ULTI is mentioned 1.00 times per day on StockTwits.
  • ULTI has not yet been mentioned on StockTwits today.
  • ULTI is currently in the upper 20% of its 1-year range.
  • ULTI is in the upper 35% of its 20-day range.
  • ULTI is in the upper 45% of its 5-day range.
  • ULTI is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on ULTI:

The Ultimate Software Group, Inc. provides cloud-based human capital management solutions primarily to enterprise companies in the United States. Its UltiPro software solution delivers the functionality businesses to manage the employee life cycle from recruitment to retirement. ULTI has a PE ratio of 82. Currently there are 13 analysts that rate Ultimate Software Group a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Ultimate Software Group has been 230,500 shares per day over the past 30 days. Ultimate Software Group has a market cap of $6.1 billion and is part of the technology sector and internet industry. The stock has a beta of 1.22 and a short float of 5.8% with 6.32 days to cover. Shares are up 9.5% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Ultimate Software Group as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 8.5%. Since the same quarter one year prior, revenues rose by 29.2%. 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.
  • Net operating cash flow has increased to $32.06 million or 23.04% when compared to the same quarter last year. In addition, ULTIMATE SOFTWARE GROUP INC has also modestly surpassed the industry average cash flow growth rate of 22.47%.
  • The gross profit margin for ULTIMATE SOFTWARE GROUP INC is rather high; currently it is at 64.66%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, ULTI's net profit margin of 1.30% significantly trails the industry average.
  • Compared to its closing price of one year ago, ULTI's share price has jumped by 27.96%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • ULTI's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.16 is very weak and demonstrates a lack of ability to pay short-term obligations.

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