Water-Logged And Getting Wetter: Fleetcor Technologies (FLT)

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.

Trade-Ideas LLC identified Fleetcor Technologies ( FLT) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Fleetcor Technologies as such a stock due to the following factors:

  • FLT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $89.6 million.
  • FLT has traded 72,974 shares today.
  • FLT traded in a range 246.6% of the normal price range with a price range of $6.80.
  • FLT traded below its daily resistance level (quality: 8 days, meaning that the stock is crossing a resistance level set by the last 8 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on FLT:

FleetCor Technologies, Inc. provides fuel cards and workforce payment products and services in North America, Latin America, Europe, Australia, and New Zealand. FLT has a PE ratio of 38.5. Currently there are 5 analysts that rate Fleetcor Technologies a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Fleetcor Technologies has been 609,100 shares per day over the past 30 days. Fleetcor has a market cap of $15.0 billion and is part of the services sector and diversified services industry. Shares are up 9.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Fleetcor Technologies as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins, good cash flow from operations, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 20.8%. Since the same quarter one year prior, revenues rose by 47.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • FLEETCOR TECHNOLOGIES INC reported significant earnings per share improvement 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, FLEETCOR TECHNOLOGIES INC increased its bottom line by earning $4.23 versus $3.37 in the prior year. This year, the market expects an improvement in earnings ($6.10 versus $4.23).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 60.8% when compared to the same quarter one year prior, rising from $68.12 million to $109.54 million.
  • The gross profit margin for FLEETCOR TECHNOLOGIES INC is rather high; currently it is at 55.50%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 29.07% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 73.45% to $290.84 million when compared to the same quarter last year. In addition, FLEETCOR TECHNOLOGIES INC has also vastly surpassed the industry average cash flow growth rate of -6.86%.

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