Trade-Ideas: Dealertrack Technologies (TRAK) Is Today's New Lifetime High 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 Dealertrack Technologies ( TRAK) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Dealertrack Technologies as such a stock due to the following factors:

  • TRAK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $17.4 million.
  • TRAK has traded 11,530 shares today.
  • TRAK is trading at a new lifetime high.

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More details on TRAK:

Dealertrack Technologies, Inc. provides Web-based software solutions to the automotive retail industry in the United States and Canada. TRAK has a PE ratio of 190.3. Currently there are 4 analysts that rate Dealertrack Technologies a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for Dealertrack Technologies has been 353,600 shares per day over the past 30 days. Dealertrack has a market cap of $2.0 billion and is part of the technology sector and internet industry. The stock has a beta of 1.67 and a short float of 7% with 9.06 days to cover. Shares are down 5% year-to-date as of the close of trading on Tuesday.

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

Highlights from the ratings report include:
  • TRAK's revenue growth has slightly outpaced the industry average of 16.5%. Since the same quarter one year prior, revenues rose by 25.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Although TRAK's debt-to-equity ratio of 0.28 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 3.00, which clearly demonstrates the ability to cover short-term cash needs.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 297.7% when compared to the same quarter one year prior, rising from -$2.93 million to $5.80 million.
  • Net operating cash flow has increased to $20.27 million or 24.79% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 12.10%.
  • Powered by its strong earnings growth of 285.71% and other important driving factors, this stock has surged by 40.23% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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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