Today's Strong And Under The Radar Stock: Providence Service (PRSC)

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 Providence Service ( PRSC) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Providence Service as such a stock due to the following factors:

  • PRSC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.6 million.
  • PRSC is making at least a new 3-day high.
  • PRSC has a PE ratio of 31.9.
  • PRSC is mentioned 0.77 times per day on StockTwits.
  • PRSC has not yet been mentioned on StockTwits today.
  • PRSC is currently in the upper 20% of its 1-year range.
  • PRSC is in the upper 35% of its 20-day range.
  • PRSC is in the upper 45% of its 5-day range.
  • PRSC is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on PRSC:

The Providence Service Corporation provides and manages government sponsored human services and non-emergency transportation services. The company operates in two segments, Human Services and Non-Emergency Transportation Services (NET Services). PRSC has a PE ratio of 31.9. Currently there are 3 analysts that rate Providence Service a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Providence Service has been 144,900 shares per day over the past 30 days. Providence Service has a market cap of $667.3 million and is part of the health care sector and health services industry. The stock has a beta of 0.86 and a short float of 4.9% with 1.40 days to cover. Shares are up 75.2% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Providence Service as a buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, revenue growth, 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:

  • PROVIDENCE SERVICE CORP has improved earnings per share by 7.0% 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, PROVIDENCE SERVICE CORP increased its bottom line by earning $1.41 versus $0.65 in the prior year. This year, the market expects an improvement in earnings ($1.98 versus $1.41).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Health Care Providers & Services industry average. The net income increased by 13.5% when compared to the same quarter one year prior, going from $5.88 million to $6.67 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 20.8%. Since the same quarter one year prior, revenues rose by 19.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has significantly increased by 3678.62% to $10.43 million when compared to the same quarter last year. In addition, PROVIDENCE SERVICE CORP has also vastly surpassed the industry average cash flow growth rate of 11.48%.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 61.02% over the past year, a rise that has exceeded that of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.

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