Stock To Watch: Vasco Data Security International (VDSI) In Perilous Reversal

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 Vasco Data Security International ( VDSI) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Vasco Data Security International as such a stock due to the following factors:

  • VDSI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $30.5 million.
  • VDSI has traded 212,699 shares today.
  • VDSI is down 17.1% today.
  • VDSI was up 5.7% yesterday.

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More details on VDSI:

VASCO Data Security International, Inc., together with its subsidiaries, designs, develops, markets, and supports hardware and software security systems that manage and secure access to information assets worldwide. VDSI has a PE ratio of 24. Currently there are 2 analysts that rate Vasco Data Security International a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Vasco Data Security International has been 1.6 million shares per day over the past 30 days. Vasco Data Security International has a market cap of $1.0 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.14 and a short float of 51% with 10.79 days to cover. Shares are down 10.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Vasco Data Security International as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels and solid stock price performance. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • VDSI's very impressive revenue growth greatly exceeded the industry average of 11.5%. Since the same quarter one year prior, revenues leaped by 67.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • VDSI has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.24, which clearly demonstrates the ability to cover short-term cash needs.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Software industry and the overall market, VASCO DATA SEC INTL INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Powered by its strong earnings growth of 277.77% and other important driving factors, this stock has surged by 129.91% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, VDSI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.

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