New Lifetime High For Alliance Data Systems Corporation (ADS)

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 or Stephanie Link.

Trade-Ideas LLC identified Alliance Data Systems Corporation ( ADS) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Alliance Data Systems Corporation as such a stock due to the following factors:

  • ADS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $109.8 million.
  • ADS has traded 345,420 shares today.
  • ADS is trading at a new lifetime high.

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More details on ADS:

Alliance Data Systems Corporation provides marketing and loyalty solutions primarily in North America. The company operates in three segments: LoyaltyOne, Epsilon, and Private Label Services and Credit. ADS has a PE ratio of 31.4. Currently there are 12 analysts that rate Alliance Data Systems Corporation a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Alliance Data Systems Corporation has been 578,700 shares per day over the past 30 days. Alliance Data Systems has a market cap of $10.3 billion and is part of the services sector and diversified services industry. The stock has a beta of 0.86 and a short float of 19.5% with 18.07 days to cover. Shares are up 45.5% year to date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Alliance Data Systems Corporation as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, growth in earnings per share, increase in net income and solid stock price performance. We feel these 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 greatly exceeded the industry average of 15.3%. Since the same quarter one year prior, revenues rose by 18.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has increased to $251.46 million or 41.41% when compared to the same quarter last year. In addition, ALLIANCE DATA SYSTEMS CORP has also vastly surpassed the industry average cash flow growth rate of -22.55%.
  • ALLIANCE DATA SYSTEMS CORP's earnings per share improvement from the most recent quarter was slightly positive. 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, ALLIANCE DATA SYSTEMS CORP increased its bottom line by earning $6.60 versus $5.46 in the prior year. This year, the market expects an improvement in earnings ($9.95 versus $6.60).
  • The net income growth from the same quarter one year ago has exceeded that of the IT Services industry average, but is less than that of the S&P 500. The net income increased by 12.2% when compared to the same quarter one year prior, going from $103.82 million to $116.44 million.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 58.31% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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