Strong And Under The Radar: Rollins (ROL)

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

  • ROL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.3 million.
  • ROL is making at least a new 3-day high.
  • ROL has a PE ratio of 34.9.
  • ROL is mentioned 0.65 times per day on StockTwits.
  • ROL has not yet been mentioned on StockTwits today.
  • ROL is currently in the upper 20% of its 1-year range.
  • ROL is in the upper 35% of its 20-day range.
  • ROL is in the upper 45% of its 5-day range.
  • ROL 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 ROL:

Rollins, Inc., through its subsidiaries, provides pest and termite control services to residential and commercial customers. The stock currently has a dividend yield of 1.3%. ROL has a PE ratio of 34.9. Currently there is 1 analyst that rates Rollins a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Rollins has been 145,300 shares per day over the past 30 days. Rollins has a market cap of $4.7 billion and is part of the services sector and diversified services industry. The stock has a beta of 0.68 and a short float of 1.5% with 6.90 days to cover. Shares are up 7.3% 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 Rollins as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, revenue growth, good cash flow from operations and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. 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.
  • ROLLINS INC has improved earnings per share by 12.0% 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, ROLLINS INC increased its bottom line by earning $0.85 versus $0.77 in the prior year. This year, the market expects an improvement in earnings ($0.94 versus $0.85).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.2%. Since the same quarter one year prior, revenues slightly increased by 6.3%. 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 increased to $67.42 million or 23.97% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -12.61%.
  • The gross profit margin for ROLLINS INC is rather high; currently it is at 50.94%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 10.68% trails the industry average.

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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