Genpact (G) Marked As A Dead Cat Bounce Stock

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 Genpact ( G) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Genpact as such a stock due to the following factors:

  • G has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $53.2 million.
  • G has traded 222,983 shares today.
  • G is up 3.1% today.
  • G was down 17.1% yesterday.

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More details on G:

Genpact Limited provides business process management and information technology services worldwide. G has a PE ratio of 17.0. Currently there are 6 analysts that rate Genpact a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Genpact has been 1.3 million shares per day over the past 30 days. Genpact has a market cap of $3.9 billion and is part of the services sector and diversified services industry. The stock has a beta of 0.99 and a short float of 0.7% with 0.27 days to cover. Shares are down 6.2% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Genpact as a buy. 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, reasonable valuation levels, compelling growth in net income and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 20.5%. Since the same quarter one year prior, revenues slightly increased by 8.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.55, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, G has a quick ratio of 1.99, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 179.1% when compared to the same quarter one year prior, rising from $25.18 million to $70.26 million.
  • Net operating cash flow has significantly increased by 62.19% to $125.54 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 21.03%.

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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