Today's Strong And Under The Radar Stock: Healthcare Services Group (HCSG)

Trade-Ideas LLC identified Healthcare Services Group ( HCSG) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Healthcare Services Group as such a stock due to the following factors:

  • HCSG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $10.9 million.
  • HCSG has traded 3.074600000000000221689333557151257991790771484375 options contracts today.
  • HCSG is making at least a new 3-day high.
  • HCSG has a PE ratio of 46.
  • HCSG is mentioned 0.52 times per day on StockTwits.
  • HCSG has not yet been mentioned on StockTwits today.
  • HCSG is currently in the upper 20% of its 1-year range.
  • HCSG is in the upper 35% of its 20-day range.
  • HCSG is in the upper 45% of its 5-day range.
  • HCSG 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 HCSG:

Healthcare Services Group, Inc. provides management, administrative, and operating services to the housekeeping, laundry, linen, facility maintenance, and dietary service departments to nursing homes, retirement complexes, rehabilitation centers, and hospitals in the United States. The stock currently has a dividend yield of 2%. HCSG has a PE ratio of 46. Currently there are 3 analysts that rate Healthcare Services Group a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Healthcare Services Group has been 327,200 shares per day over the past 30 days. Healthcare Services Group has a market cap of $2.7 billion and is part of the services sector and diversified services industry. The stock has a beta of 0.65 and a short float of 8.8% with 20.54 days to cover. Shares are up 5.5% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Healthcare Services Group 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, notable return on equity and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • HCSG's revenue growth has slightly outpaced the industry average of 2.0%. Since the same quarter one year prior, revenues slightly increased by 7.2%. 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.
  • HCSG 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 3.31, 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 Commercial Services & Supplies industry and the overall market, HEALTHCARE SERVICES GROUP's return on equity exceeds that of both the industry average and the S&P 500.
  • HEALTHCARE SERVICES GROUP's earnings per share declined by 40.9% in the most recent quarter compared to the same quarter a year ago. 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, HEALTHCARE SERVICES GROUP increased its bottom line by earning $0.82 versus $0.32 in the prior year. This year, the market expects an improvement in earnings ($1.10 versus $0.82).
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. 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.

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