Progress Software Corporation (PRGS) 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.

Trade-Ideas LLC identified Progress Software Corporation ( PRGS) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Progress Software Corporation as such a stock due to the following factors:

  • PRGS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.8 million.
  • PRGS is making at least a new 3-day high.
  • PRGS has a PE ratio of 37.
  • PRGS is mentioned 0.87 times per day on StockTwits.
  • PRGS has not yet been mentioned on StockTwits today.
  • PRGS is currently in the upper 20% of its 1-year range.
  • PRGS is in the upper 35% of its 20-day range.
  • PRGS is in the upper 45% of its 5-day range.
  • PRGS 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 PRGS:

Progress Software Corporation provides software solutions for various industries worldwide. PRGS has a PE ratio of 37. Currently there is 1 analyst that rates Progress Software Corporation a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Progress Software Corporation has been 223,500 shares per day over the past 30 days. Progress Software has a market cap of $1.4 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.52 and a short float of 1.2% with 4.06 days to cover. Shares are up 0.4% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Progress Software Corporation as a hold. 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 and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 4.9%. Since the same quarter one year prior, revenues slightly increased by 9.2%. 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.
  • Although PRGS's debt-to-equity ratio of 0.28 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.40, which illustrates the ability to avoid short-term cash problems.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 108.7% when compared to the same quarter one year ago, falling from $11.10 million to -$0.97 million.
  • 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, PROGRESS SOFTWARE CORP's return on equity is below that of both the industry average and the S&P 500.

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