Lincoln Educational Services Strong Technical, Back to School Theme

Written by GSCR Staff   
Thursday, 28 July 2016 06:53

In Monday’s Goldman Guide we pointed out a couple of factors we are looking at right now. First, a high RSI, which is typically and overbought signal here, but we are using as a momentum indicator. Secondly, it is not too early to think about back to school as far as the market goes.

Lincoln Educational Services Corporation (NASDAQ – LINC - $1.69) is a relatively cheap stock with a current RSI over 60, an overbought signal. Also, as illustrated below, the LINC is now trading over the 25-day EMA.

LINC 6-Month Chart, 25 Day EMA

(Source: www.otcmarkets.com)

MM.07.28.16.LINC-6mo-25ema

Lincoln Educational Services Corporation, together with its subsidiaries, provides various career-oriented post-secondary education services in the United States. It offers bachelor's degree, associate's degree, and diploma and certificate programs in automotive technology, skilled trades, healthcare services, hospitality services, and business and information technology areas to recent high school graduates and working adults. The Company operates 31 schools in 15 states under the Lincoln Technical Institute, Lincoln College of Technology, Lincoln College of New England, Lincoln Culinary Institute, and Euphoria Institute of Beauty Arts and Sciences brand names.

The first metric that jumps out is the technical indicator, short float. Lincoln is under 1%. Additionally, the forward P/E is 8.5 on consensus analysts’ revenue growth estimates of 29% in 2016 and 300% in 2017! Finally, positive EPS surprises can be critical to ‘pops’ especially in the small cap world. The Company has averaged plus 171% in that regard over the last three quarters.

We like the technical analysis for LINC combined with the back to school theme. Wall Street analysts appear to love the stock as well given the revenue estimates over the next two years. For these reasons we think the stock climbs to $3 by the end of the year.

Have a great day!

Goldman Small Cap Research is not affiliated in any way with Goldman Sachs & Co.

It is important to note that while we may track performance separately, we utilize the same coverage criteria in determining coverage of all stocks in both research formats. Please view the company’s individual disclosures for each engagement, which can be found in each company-specific report. All information contained in this blog, newsletter and in our reports were provided by the Companies or generated from our own due diligence. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. Analysts are compensated on a per report basis and not on the basis of his/her recommendations.

The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, or other firms. Goldman Small Cap Research relied solely upon information provided by the Company through its filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research blog, report, note, or newsletter is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed.

This blog does not take into account the investment objectives, financial situation, or particular needs of any particular person. This blog does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with FINRA or with any state securities regulatory authority.

ALL INFORMATION IN THIS BLOG, REPORT OR NEWSLETTER IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.

For more information, visit our Disclaimer: www.goldmanresearch.com

Add comment
  • No comments found