Trade-Ideas: Telephone And Data Systems (TDS) Is Today's Strong And Under The Radar Stock

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

  • TDS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $17.5 million.
  • TDS has traded 88.0896000000000043428372009657323360443115234375 options contracts today.
  • TDS is making at least a new 3-day high.
  • TDS has a PE ratio of 4.
  • TDS is mentioned 0.52 times per day on StockTwits.
  • TDS has not yet been mentioned on StockTwits today.
  • TDS is currently in the upper 20% of its 1-year range.
  • TDS is in the upper 35% of its 20-day range.
  • TDS is in the upper 45% of its 5-day range.
  • TDS 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 TDS:

Telephone & Data Systems Inc., a telecommunications company, provides wireless, wireline, cable, and hosted and managed services in the United States. The stock currently has a dividend yield of 2%. TDS has a PE ratio of 4. Currently there are 3 analysts that rate Telephone and Data Systems a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Telephone and Data Systems has been 511,400 shares per day over the past 30 days. Telephone and Data Systems has a market cap of $3.2 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 1.06 and a short float of 1.5% with 2.08 days to cover. Shares are up 14.3% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Telephone and Data Systems as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • Despite currently having a low debt-to-equity ratio of 0.59, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that TDS's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.08 is high and demonstrates strong liquidity.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.0%. Since the same quarter one year prior, revenues slightly dropped by 0.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for TELEPHONE & DATA SYSTEMS INC is rather high; currently it is at 53.42%. Regardless of TDS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TDS's net profit margin of 0.64% is significantly lower than the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Wireless Telecommunication Services industry. The net income has significantly decreased by 94.5% when compared to the same quarter one year ago, falling from $145.74 million to $8.00 million.
  • Net operating cash flow has decreased to $246.00 million or 30.76% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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