Comfort Systems USA (FIX) Showing Signs Of Being Strong And Under The Radar

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

  • FIX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.3 million.
  • FIX is making at least a new 3-day high.
  • FIX has a PE ratio of 31.
  • FIX is mentioned 1.74 times per day on StockTwits.
  • FIX has not yet been mentioned on StockTwits today.
  • FIX is currently in the upper 20% of its 1-year range.
  • FIX is in the upper 35% of its 20-day range.
  • FIX is in the upper 45% of its 5-day range.
  • FIX 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 FIX:

Comfort Systems USA, Inc. provides installation, maintenance, repair, and replacement services for heating, ventilation, and air conditioning (HVAC) systems in the mechanical services industry. The stock currently has a dividend yield of 1.1%. FIX has a PE ratio of 31. Currently there is 1 analyst that rates Comfort Systems USA a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Comfort Systems USA has been 245,500 shares per day over the past 30 days. Comfort Systems USA has a market cap of $837.6 million and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.44 and a short float of 3.4% with 3.93 days to cover. Shares are up 31.1% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Comfort Systems USA 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, increase in net income, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 4.1%. Since the same quarter one year prior, revenues rose by 15.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • FIX's debt-to-equity ratio is very low at 0.12 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.32, which illustrates the ability to avoid short-term cash problems.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Construction & Engineering industry. The net income increased by 1250.9% when compared to the same quarter one year prior, rising from $0.38 million to $5.07 million.
  • Net operating cash flow has significantly increased by 332.41% to $20.42 million when compared to the same quarter last year. In addition, COMFORT SYSTEMS USA INC has also vastly surpassed the industry average cash flow growth rate of 41.88%.
  • Powered by its strong earnings growth of 1200.00% and other important driving factors, this stock has surged by 41.95% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.

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