Water-Logged And Getting Wetter: SEI Investments (SEIC)

Trade-Ideas LLC identified SEI Investments ( SEIC) 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 SEI Investments as such a stock due to the following factors:

  • SEIC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $40.9 million.
  • SEIC has traded 993,616 shares today.
  • SEIC traded in a range 207.8% of the normal price range with a price range of $3.64.
  • SEIC 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 SEIC:

SEI Investments Co. is a publicly owned investment manager. The firm provides wealth management and investment advisory services to its clients through its subsidiaries. The stock currently has a dividend yield of 1.2%. SEIC has a PE ratio of 23. Currently there are 4 analysts that rate SEI Investments a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for SEI Investments has been 713,300 shares per day over the past 30 days. SEI Investments has a market cap of $7.2 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.07 and a short float of 1% with 1.46 days to cover. Shares are down 14.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates SEI Investments as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:
  • SEIC's revenue growth has slightly outpaced the industry average of 0.4%. Since the same quarter one year prior, revenues slightly increased by 4.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • 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 Capital Markets industry and the overall market, SEI INVESTMENTS CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $117.70 million or 20.22% when compared to the same quarter last year. In addition, SEI INVESTMENTS CO has also vastly surpassed the industry average cash flow growth rate of -50.61%.
  • SEI INVESTMENTS CO' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SEI INVESTMENTS CO increased its bottom line by earning $1.85 versus $1.63 in the prior year. This year, the market expects an improvement in earnings ($1.95 versus $1.85).
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Capital Markets industry average. The net income has decreased by 5.4% when compared to the same quarter one year ago, dropping from $83.98 million to $79.43 million.

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