VCA (WOOF) Is Today's Strong And Under The Radar 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 VCA ( WOOF) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified VCA as such a stock due to the following factors:

  • WOOF has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $35.7 million.
  • WOOF is making at least a new 3-day high.
  • WOOF has a PE ratio of 31.9.
  • WOOF is mentioned 0.74 times per day on StockTwits.
  • WOOF has not yet been mentioned on StockTwits today.
  • WOOF is currently in the upper 20% of its 1-year range.
  • WOOF is in the upper 35% of its 20-day range.
  • WOOF is in the upper 45% of its 5-day range.
  • WOOF 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 WOOF:

VCA Inc. operates as an animal healthcare company in the United States and Canada. It operates through two segments, Animal Hospital and Laboratory. WOOF has a PE ratio of 31.9. Currently there are 4 analysts that rate VCA a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for VCA has been 710,900 shares per day over the past 30 days. VCA has a market cap of $4.0 billion and is part of the services sector and diversified services industry. The stock has a beta of 1.02 and a short float of 2.1% with 2.25 days to cover. Shares are up 48.6% year-to-date as of the close of trading on Tuesday.

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 VCA as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • WOOF's revenue growth trails the industry average of 19.8%. Since the same quarter one year prior, revenues slightly increased by 7.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The current debt-to-equity ratio, 0.51, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.01, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has slightly increased to $96.93 million or 6.59% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -20.16%.
  • Compared to its closing price of one year ago, WOOF's share price has jumped by 61.19%, exceeding the performance of the broader market during that same time frame. 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.
  • VCA INC's earnings per share declined by 31.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, VCA INC increased its bottom line by earning $1.53 versus $0.51 in the prior year. This year, the market expects an improvement in earnings ($1.89 versus $1.53).

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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