Strong And Under The Radar: KCG Holdings (KCG)

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

  • KCG has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.7 million.
  • KCG has traded 893.9550000000000409272615797817707061767578125 options contracts today.
  • KCG is making at least a new 3-day high.
  • KCG has a PE ratio of 22.
  • KCG is mentioned 1.83 times per day on StockTwits.
  • KCG has not yet been mentioned on StockTwits today.
  • KCG is currently in the upper 20% of its 1-year range.
  • KCG is in the upper 35% of its 20-day range.
  • KCG is in the upper 45% of its 5-day range.
  • KCG 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 KCG:

KCG Holdings, Inc., an independent securities firm, provides various services designed to address trading needs across asset classes, product types, and time zones. The company operates through three segments: Market Making, Global Execution Services, and Corporate and Other. KCG has a PE ratio of 22. Currently there are 2 analysts that rate KCG Holdings a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for KCG Holdings has been 544,400 shares per day over the past 30 days. KCG has a market cap of $1.2 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.17 and a short float of 8.8% with 6.01 days to cover. Shares are up 14.3% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates KCG Holdings as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations 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:
  • The revenue growth greatly exceeded the industry average of 24.5%. Since the same quarter one year prior, revenues slightly increased by 8.5%. 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.
  • Net operating cash flow has significantly increased by 816.27% to $132.33 million when compared to the same quarter last year. In addition, KCG HOLDINGS INC has also vastly surpassed the industry average cash flow growth rate of -198.91%.
  • After a year of stock price fluctuations, the net result is that KCG's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • KCG HOLDINGS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, KCG HOLDINGS INC increased its bottom line by earning $2.22 versus $0.53 in the prior year. For the next year, the market is expecting a contraction of 46.6% in earnings ($1.19 versus $2.22).
  • The gross profit margin for KCG HOLDINGS INC is currently lower than what is desirable, coming in at 28.36%. Regardless of KCG's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 10.87% trails the industry average.

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