Today's Dead Cat Bounce Stock: Maximus (MMS)

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

  • MMS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.5 million.
  • MMS has traded 245,458 shares today.
  • MMS is up 3.2% today.
  • MMS was down 7.4% yesterday.

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More details on MMS:

MAXIMUS, Inc. provides business process services to government health and human services agencies in the United States, Australia, Canada, the United Kingdom, and Saudi Arabia. The company operates in two segments, Health Services and Human Services. The stock currently has a dividend yield of 0.4%. MMS has a PE ratio of 20.9. Currently there are 3 analysts that rate Maximus a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Maximus has been 323,000 shares per day over the past 30 days. Maximus has a market cap of $2.8 billion and is part of the services sector and diversified services industry. The stock has a beta of 0.98 and a short float of 1.6% with 2.92 days to cover. Shares are down 12.3% year-to-date as of the close of trading on Thursday.

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 Maximus 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, impressive record of earnings per share growth, compelling growth in net income and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 11.9%. Since the same quarter one year prior, revenues rose by 41.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • MMS's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, MMS has a quick ratio of 1.85, which demonstrates the ability of the company to cover short-term liquidity needs.
  • MAXIMUS INC has improved earnings per share by 29.7% in the most recent quarter compared to the same quarter a year ago. 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, MAXIMUS INC increased its bottom line by earning $1.68 versus $1.10 in the prior year. This year, the market expects an improvement in earnings ($2.08 versus $1.68).
  • 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 IT Services industry average. The net income increased by 30.0% when compared to the same quarter one year prior, rising from $31.69 million to $41.21 million.

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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