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

  • TMH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $21.5 million.
  • TMH is making at least a new 3-day high.
  • TMH has a PE ratio of 43.
  • TMH is mentioned 1.10 times per day on StockTwits.
  • TMH has not yet been mentioned on StockTwits today.
  • TMH is currently in the upper 20% of its 1-year range.
  • TMH is in the upper 35% of its 20-day range.
  • TMH is in the upper 45% of its 5-day range.
  • TMH 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 TMH:

Team Health Holdings, Inc. provides outsourced healthcare professional staffing and administrative services to hospitals and other healthcare providers in the United States. TMH has a PE ratio of 43. Currently there are 12 analysts that rate Team Health Holdings a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Team Health Holdings has been 391,000 shares per day over the past 30 days. Team Health has a market cap of $4.4 billion and is part of the services sector and diversified services industry. The stock has a beta of 1.29 and a short float of 2.8% with 5.67 days to cover. Shares are up 5.3% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Team Health Holdings as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, increase in net income, solid stock price performance and notable return on equity. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 13.1%. Since the same quarter one year prior, revenues rose by 31.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • TEAM HEALTH HOLDINGS INC has improved earnings per share by 15.2% 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, TEAM HEALTH HOLDINGS INC increased its bottom line by earning $1.35 versus $1.23 in the prior year. This year, the market expects an improvement in earnings ($2.69 versus $1.35).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Health Care Providers & Services industry average. The net income increased by 17.6% when compared to the same quarter one year prior, going from $23.85 million to $28.05 million.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Health Care Providers & Services industry and the overall market, TEAM HEALTH HOLDINGS INC's return on equity exceeds that of both the industry average and the S&P 500.

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