Strong And Under The Radar: Strayer Education (STRA)

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

  • STRA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.1 million.
  • STRA is making at least a new 3-day high.
  • STRA has a PE ratio of 7.5.
  • STRA is mentioned 0.29 times per day on StockTwits.
  • STRA has not yet been mentioned on StockTwits today.
  • STRA is currently in the upper 20% of its 1-year range.
  • STRA is in the upper 35% of its 20-day range.
  • STRA is in the upper 45% of its 5-day range.
  • STRA 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 STRA:

Strayer Education, Inc., through its subsidiary, Strayer University, provides post-secondary education services for working adults. STRA has a PE ratio of 7.5. Currently there are 2 analysts that rate Strayer Education a buy, 3 analysts rate it a sell, and 6 rate it a hold.

The average volume for Strayer Education has been 118,800 shares per day over the past 30 days. Strayer has a market cap of $646.0 million and is part of the services sector and diversified services industry. The stock has a beta of 1.49 and a short float of 21.1% with 15.74 days to cover. Shares are up 72.2% year-to-date as of the close of trading on Monday.

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 Strayer Education as a hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and generally higher debt management risk.

Highlights from the ratings report include:
  • The gross profit margin for STRAYER EDUCATION INC is rather high; currently it is at 51.42%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, STRA's net profit margin of 12.13% significantly trails the industry average.
  • STRA, with its decline in revenue, underperformed when compared the industry average of 6.8%. Since the same quarter one year prior, revenues fell by 14.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Compared to its closing price of one year ago, STRA's share price has jumped by 43.05%, exceeding the performance of the broader market during that same time frame. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Diversified Consumer Services industry average. The net income has decreased by 8.8% when compared to the same quarter one year ago, dropping from $15.00 million to $13.68 million.
  • Net operating cash flow has decreased to $11.98 million or 40.64% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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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