FactSet Research Systems (FDS) Is Water-Logged And Getting Wetter Today

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 FactSet Research Systems ( FDS) 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 FactSet Research Systems as such a stock due to the following factors:

  • FDS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $44.1 million.
  • FDS has traded 57,080 shares today.
  • FDS traded in a range 209.2% of the normal price range with a price range of $4.60.
  • FDS traded below its daily resistance level (quality: 6 days, meaning that the stock is crossing a resistance level set by the last 6 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 FDS:

FactSet Research Systems Inc. provides integrated financial information and analytical applications to investment community in the United States, Europe, and the Asia Pacific. The stock currently has a dividend yield of 1.1%. FDS has a PE ratio of 31. Currently there are 2 analysts that rate FactSet Research Systems a buy, no analysts rate it a sell, and 11 rate it a hold.

The average volume for FactSet Research Systems has been 306,600 shares per day over the past 30 days. FactSet Research Systems has a market cap of $6.9 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.65 and a short float of 6.7% with 8.84 days to cover. Shares are up 17.6% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates FactSet Research Systems 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, notable return on equity, solid stock price performance and growth in earnings per share. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.0%. Since the same quarter one year prior, revenues slightly increased by 9.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • FDS's debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, FDS has a quick ratio of 2.03, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 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. Compared to other companies in the Software industry and the overall market, FACTSET RESEARCH SYSTEMS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 50.04% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, FDS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • FACTSET RESEARCH SYSTEMS INC has improved earnings per share by 19.7% 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, FACTSET RESEARCH SYSTEMS INC increased its bottom line by earning $4.93 versus $4.47 in the prior year. This year, the market expects an improvement in earnings ($5.60 versus $4.93).

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