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

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 $10.8 million.
  • HCSG has traded 5.11939999999999972857267493964172899723052978515625 options contracts today.
  • HCSG is making at least a new 3-day high.
  • HCSG has a PE ratio of 44.
  • HCSG is mentioned 0.93 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 44. 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 300,200 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 0.60 and a short float of 8.5% with 19.47 days to cover. Shares are up 7.9% year-to-date as of the close of trading on Wednesday.

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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, impressive record of earnings per share growth and compelling growth in net income. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • HCSG's revenue growth has slightly outpaced the industry average of 2.1%. Since the same quarter one year prior, revenues slightly increased by 8.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the 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 3.29, 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 has improved earnings per share by 18.2% 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, 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 ($1.08 versus $0.82).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Services & Supplies industry. The net income increased by 20.0% when compared to the same quarter one year prior, going from $15.52 million to $18.63 million.

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