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

  • WEX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $27.9 million.
  • WEX has traded 12,436 shares today.
  • WEX is trading at a new lifetime high.

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More details on WEX:

WEX Inc. provides corporate card payment solutions in North and South America, the Asia Pacific, and Europe. It operates in two segments, Fleet Payment Solutions and Other Payment Solutions. WEX has a PE ratio of 27.1. Currently there are 4 analysts that rate WEX a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for WEX has been 204,800 shares per day over the past 30 days. WEX has a market cap of $4.3 billion and is part of the services sector and diversified services industry. The stock has a beta of 1.89 and a short float of 3.6% with 5.69 days to cover. Shares are up 11.7% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates WEX as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, growth in earnings per share, increase in net income and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 12.2%. Since the same quarter one year prior, revenues rose by 13.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 48.17% is the gross profit margin for WEX INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 21.49% is above that of the industry average.
  • WEX INC's earnings per share improvement from the most recent quarter was slightly positive. 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, WEX INC increased its bottom line by earning $3.81 versus $2.48 in the prior year. This year, the market expects an improvement in earnings ($4.97 versus $3.81).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the IT Services industry average. The net income increased by 2.6% when compared to the same quarter one year prior, going from $42.21 million to $43.33 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the IT Services industry and the overall market on the basis of return on equity, WEX INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.

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