Medidata Solutions (MDSO) Highlighted As Strong And Under The Radar Stock Of The Day

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

  • MDSO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $23.0 million.
  • MDSO is making at least a new 3-day high.
  • MDSO has a PE ratio of 382.
  • MDSO is mentioned 1.74 times per day on StockTwits.
  • MDSO has not yet been mentioned on StockTwits today.
  • MDSO is currently in the upper 20% of its 1-year range.
  • MDSO is in the upper 35% of its 20-day range.
  • MDSO is in the upper 45% of its 5-day range.
  • MDSO 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 MDSO:

Medidata Solutions, Inc. provides cloud-based clinical development solutions for life sciences in the United States and internationally. The company offers applications and data analytics for clinical development. MDSO has a PE ratio of 382. Currently there are 7 analysts that rate Medidata Solutions a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Medidata Solutions has been 532,200 shares per day over the past 30 days. Medidata has a market cap of $3.0 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.81 and a short float of 10.4% with 13.57 days to cover. Shares are up 11.8% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Medidata Solutions as a buy. The company's strengths can be seen in multiple areas, such as its increase in net income, robust revenue growth, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Technology industry. The net income increased by 108.7% when compared to the same quarter one year prior, rising from -$1.82 million to $0.16 million.
  • MDSO's revenue growth trails the industry average of 42.7%. Since the same quarter one year prior, revenues rose by 20.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has significantly increased by 368.29% to $16.87 million when compared to the same quarter last year. In addition, MEDIDATA SOLUTIONS INC has also vastly surpassed the industry average cash flow growth rate of 50.29%.
  • The gross profit margin for MEDIDATA SOLUTIONS INC is currently very high, coming in at 78.77%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, MDSO's net profit margin of 0.16% significantly trails the industry average.
  • Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 43.02% 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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