Kforce (KFRC) Flagged As Strong On High Volume

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 Kforce ( KFRC) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Kforce as such a stock due to the following factors:

  • KFRC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.1 million.
  • KFRC has traded 52,712 shares today.
  • KFRC is trading at 14.63 times the normal volume for the stock at this time of day.
  • KFRC is trading at a new high 6.00% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on KFRC:

Kforce Inc. provides professional and technical specialty staffing services and solutions in the United States and internationally. The company operates through Technology (Tech), Finance and Accounting (FA), and Government Solutions (GS) segments. The stock currently has a dividend yield of 2.1%. KFRC has a PE ratio of 21. Currently there are 3 analysts that rate Kforce a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Kforce has been 110,100 shares per day over the past 30 days. Kforce has a market cap of $627.6 million and is part of the services sector and diversified services industry. The stock has a beta of 1.49 and a short float of 2.1% with 3.89 days to cover. Shares are down 12.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Kforce 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, impressive record of earnings per share growth, reasonable valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 1.2%. Since the same quarter one year prior, revenues rose by 10.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.69, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, KFRC has a quick ratio of 2.28, which demonstrates the ability of the company to cover short-term liquidity needs.
  • KFORCE INC reported significant earnings per share improvement 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, KFORCE INC increased its bottom line by earning $0.94 versus $0.16 in the prior year. This year, the market expects an improvement in earnings ($1.36 versus $0.94).
  • Net operating cash flow has significantly increased by 92.08% to $11.41 million when compared to the same quarter last year. In addition, KFORCE INC has also vastly surpassed the industry average cash flow growth rate of 19.21%.

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