Don't Miss Today's Strong And Under The Radar Stock: Rollins (ROL)

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

  • ROL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.4 million.
  • ROL is making at least a new 3-day high.
  • ROL has a PE ratio of 41.
  • ROL is mentioned 0.52 times per day on StockTwits.
  • ROL has not yet been mentioned on StockTwits today.
  • ROL is currently in the upper 20% of its 1-year range.
  • ROL is in the upper 35% of its 20-day range.
  • ROL is in the upper 45% of its 5-day range.
  • ROL 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 ROL:

Rollins, Inc., through its subsidiaries, provides pest and termite control services to residential and commercial customers. The stock currently has a dividend yield of 1.2%. ROL has a PE ratio of 41. Currently there is 1 analyst that rates Rollins a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Rollins has been 273,100 shares per day over the past 30 days. Rollins has a market cap of $5.8 billion and is part of the services sector and diversified services industry. The stock has a beta of 0.78 and a short float of 1.9% with 6.55 days to cover. Shares are up 20.2% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Rollins as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, notable return on equity and expanding profit margins. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:
  • ROL's revenue growth has slightly outpaced the industry average of 1.2%. Since the same quarter one year prior, revenues slightly increased by 5.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • ROLLINS INC has improved earnings per share by 16.7% 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, ROLLINS INC increased its bottom line by earning $0.63 versus $0.57 in the prior year. This year, the market expects an improvement in earnings ($0.72 versus $0.63).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Services & Supplies industry. The net income increased by 17.5% when compared to the same quarter one year prior, going from $25.77 million to $30.28 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Commercial Services & Supplies industry and the overall market, ROLLINS INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • 49.22% is the gross profit margin for ROLLINS INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 9.15% is above that of the industry average.

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