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 Healthsouth ( HLS) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Healthsouth as such a stock due to the following factors:

  • HLS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $18.6 million.
  • HLS has traded 15,788 shares today.
  • HLS is trading at a new lifetime high.

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More details on HLS:

HealthSouth Corporation owns and operates inpatient rehabilitation hospitals in the United States. The company provides specialized rehabilitative treatment on an inpatient and outpatient basis. The stock currently has a dividend yield of 2%. HLS has a PE ratio of 13.8. Currently there are 4 analysts that rate Healthsouth a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Healthsouth has been 528,100 shares per day over the past 30 days. Healthsouth has a market cap of $3.2 billion and is part of the health care sector and health services industry. The stock has a beta of 2.26 and a short float of 4.8% with 8.27 days to cover. Shares are up 8.1% year-to-date as of the close of trading on Wednesday.

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 Healthsouth as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • HLS's revenue growth trails the industry average of 16.8%. Since the same quarter one year prior, revenues slightly increased by 3.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Health Care Providers & Services industry and the overall market, HEALTHSOUTH CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • HEALTHSOUTH CORP reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, HEALTHSOUTH CORP increased its bottom line by earning $2.42 versus $1.64 in the prior year. For the next year, the market is expecting a contraction of 21.1% in earnings ($1.91 versus $2.42).
  • The debt-to-equity ratio is very high at 3.35 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, HLS's quick ratio is somewhat strong at 1.08, demonstrating the ability to handle short-term liquidity needs.

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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