FleetMatics Group (FLTX) Highlighted As Today's Perilous Reversal 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.

Trade-Ideas LLC identified FleetMatics Group ( FLTX) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified FleetMatics Group as such a stock due to the following factors:

  • FLTX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $33.2 million.
  • FLTX has traded 229,824 shares today.
  • FLTX is down 3% today.
  • FLTX was up 5.1% yesterday.

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More details on FLTX:

Fleetmatics Group PLC provides software-as-a-service fleet management solutions for small and medium-sized businesses (SMBs) worldwide. FLTX has a PE ratio of 44. Currently there are 5 analysts that rate FleetMatics Group a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for FleetMatics Group has been 540,000 shares per day over the past 30 days. FleetMatics Group has a market cap of $1.6 billion and is part of the technology sector and computer software & services industry. The stock has a beta of -0.18 and a short float of 18.3% with 5.42 days to cover. Shares are up 20.6% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates FleetMatics Group as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 1.7%. Since the same quarter one year prior, revenues rose by 26.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • FLTX's debt-to-equity ratio is very low at 0.09 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.26, which clearly demonstrates the ability to cover short-term cash needs.
  • FLEETMATICS GROUP PLC reported significant earnings per share improvement 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, FLEETMATICS GROUP PLC reported lower earnings of $0.70 versus $0.81 in the prior year. This year, the market expects an improvement in earnings ($1.28 versus $0.70).
  • Net operating cash flow has decreased to $17.29 million or 14.63% when compared to the same quarter last year. Despite a decrease in cash flow of 14.63%, FLEETMATICS GROUP PLC is in line with the industry average cash flow growth rate of -15.75%.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Software industry and the overall market, FLEETMATICS GROUP PLC's return on equity is below that of both the industry average and the S&P 500.

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