Trade-Ideas: Red Hat (RHT) Is Today's Post-Market Leader Stock

Trade-Ideas LLC identified Red Hat ( RHT) as a post-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified Red Hat as such a stock due to the following factors:

  • RHT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $126.1 million.
  • RHT is up 2% today from today's close.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in RHT with the Ticky from Trade-Ideas. See the FREE profile for RHT NOW at Trade-Ideas

More details on RHT:

Red Hat, Inc. provides open source software solutions to enterprise customers worldwide. It develops and offers operating system, virtualization, middleware, storage, and cloud technologies. RHT has a PE ratio of 64. Currently there are 13 analysts that rate Red Hat a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Red Hat has been 1.9 million shares per day over the past 30 days. Red Hat has a market cap of $12.1 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.08 and a short float of 4% with 3.24 days to cover. Shares are down 21.1% year-to-date as of the close of trading on Tuesday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Red Hat as a hold. 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 and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a decline in the stock price during the past year and premium valuation.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 6.3%. Since the same quarter one year prior, revenues rose by 14.8%. 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 current debt-to-equity ratio, 0.54, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.17, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has slightly increased to $139.60 million or 4.97% when compared to the same quarter last year. Despite an increase in cash flow, RED HAT INC's cash flow growth rate is still lower than the industry average growth rate of 26.54%.
  • RHT is off 5.61% from its price level of one year ago, reflecting a combination of (a) the general market trend and (b) the company's own weaknesses, including its lower earnings per share compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

If you liked this article you might like

Shorts Trampled In Bull Market Rally; UPS Share Structure Examined -- ICYMI

Shorts Trampled In Bull Market Rally; UPS Share Structure Examined -- ICYMI

Jim Cramer: Short Footprints Everywhere

Jim Cramer: Short Footprints Everywhere

Jim Cramer: Odd and Crazy Market Has Lost Its Mind

Jim Cramer: Odd and Crazy Market Has Lost Its Mind

Cramer: 10 Points to Consider

Cramer: 10 Points to Consider

Adobe Stock Could Triple From Where It Is Now

Adobe Stock Could Triple From Where It Is Now