Water-Logged And Getting Wetter: ManpowerGroup (MAN)

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 ManpowerGroup ( MAN) 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 ManpowerGroup as such a stock due to the following factors:

  • MAN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $53.6 million.
  • MAN has traded 354,559 shares today.
  • MAN traded in a range 245.5% of the normal price range with a price range of $3.93.
  • MAN traded below its daily resistance level (quality: 3 days, meaning that the stock is crossing a resistance level set by the last 3 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 MAN:

ManpowerGroup Inc. provides workforce solutions and services. The stock currently has a dividend yield of 1.3%. MAN has a PE ratio of 27.7. Currently there are 5 analysts that rate ManpowerGroup a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for ManpowerGroup has been 606,900 shares per day over the past 30 days. ManpowerGroup has a market cap of $5.7 billion and is part of the services sector and diversified services industry. The stock has a beta of 2.56 and a short float of 1.7% with 1.39 days to cover. Shares are up 71.9% year to date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates ManpowerGroup as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • Powered by its strong earnings growth of 70.58% and other important driving factors, this stock has surged by 108.46% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MAN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Professional Services industry average. The net income increased by 66.3% when compared to the same quarter one year prior, rising from $41.00 million to $68.20 million.
  • MAN's debt-to-equity ratio is very low at 0.21 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.34, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has significantly increased by 50.79% to -$9.30 million when compared to the same quarter last year. In addition, MANPOWERGROUP has also modestly surpassed the industry average cash flow growth rate of 44.58%.

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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