Why Healthcare Services Group, Inc. (HCSG) Is The Stock Your Portfolio Needs?

It has been reported that multiple insider activity took place at Healthcare Services Group, Inc. (HCSG). Director MOSS ROBERT J sold 2,000 shares in transaction occurred on 2018/12/03. After making this transaction, Director owns a direct stake of -28 shares. On 2018/11/30 Ottaviano Dino D, Director at HCSG, dumped 700 shares at an average price of $46.98 per share. The selling total is valued at $18,545.

Director, MOSS ROBERT J had divested 5,001 shares through a trade on 2018/11/07. Following this activity, the insider holds -22 shares.

Janus Henderson Triton Fund revealed as top hedge fund owner in Healthcare Services Group, Inc. (HCSG) with a stake of over 3.05M HCSG shares as of December 30, with a market value of approx. $122.58M as of today. The second largest holder, iShares Core S&P Midcap ETF, with 2.11M shares which equates to $80.43M worth of the stock. At third is Vanguard Small-Cap Index Fund, which stood pat with 1.79M shares, a 2.88% position in Healthcare Services Group, Inc., worth $72.67M. The insider holding in stood at 0.3% while institutions hold 0%.

Healthcare Services Group, Inc. (NASDAQ:HCSG) dropped -0.67% in recent trade and currently has a stock-market value of $2.52B. The shares finished at $34.09, after trading as low as $34.01 earlier in the session. It hit an intraday high Friday at $34.68. Trading activity significantly weakened as the volume at ready counter decreased to 850,746 shares versus 1,215,525 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 1,010,706 shares. The stock is now 14.59% above against its bear-market low of $29.75 on March 18, 2019. It has retreated -42.95% since it’s 52-week high of $48.73 reached in December. Now the market price is down -19.45% on the year and down -15.16% YTD.

HCSG stock’s 50 day simple moving average (SMA 50) price is $35.67 and its 200-day simple moving average (SMA 200) price is $40.44. The company’s stock currently has a total float of 73.7M shares. Its weekly volatility is hovering around 2.3% and felt 3.01% volatility in price over a month. On the upside, the share price will test short term resistance at around $34.51. On a downside, the stock is likely to find some support, which begins at $33.84. The failure to get near-term support could push it to $33.59.

It had seen a new analyst call from Berenberg, which initiated the stock at Hold on October 04. Analysts at Stifel, shed their positive views on July 18 by lowering it fromHold to Sell. The stock won favor of Jefferies analysts who expressed their confidence in it using an upgrade from Hold to Buy on June 27. William Blair analysts came out with bullish views on June 06 when the call was made. They think the stock is now Outperform compared to to their prior call for Mkt Perform.

When looking at valuations, Healthcare Services Group, Inc. (HCSG) has a cheap P/E of 30.44x as compared to industry average of 65.95x. Moreover, it trades for 19.72 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 5.73x price/book and 1.25x price/sales. Compared to others, Healthcare Services Group, Inc. is in a different league with regards to profitability, having net margins of 4.2%. To put some perspective around this, the industry’s average net margin is 9.93%. HCSG’s ROE is 20.1%, which is also considerably better than the industry’s ROE of 11.73%. It’s also very liquid in the near term, with a current ratio of 3.1. The stock has a debt/capital of 0.07.

Shares of HCSG have dropped -19.2% since the company’s most recent earnings report. Over the past 12 fiscal quarters, Healthcare Services Group, Inc. (NASDAQ:HCSG) has topped consensus earnings estimates in 3 quarters (25%), missed earnings in 6 quarters (50%), whereas at 3 occasion EPS met analyst expectations. HCSG last reported earnings that exceeded expectations. The company raked in $0.42 per share, -97.19% change on the same period last year. That was better than consensus for $0.37. Revenue for the recent quarter stood at $496.41 million, down -1% on last year and below the $508.46 million predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $491.41 million to $510.1 million, which should be compared with $557.19 million generated last year. EPS is seen in a range of $0.36 to $0.38, against the $0.46 reported a year ago.