Institutional Activity Declining in Shares of The Providence Service Corporation (NASDAQ:PRSC)

According to the latest filings, institutions owning shares of The Providence Service Corporation (NASDAQ:PRSC) have decreased their positions by -0.08%.  Institutions now own 97.60% of the company.

New investors may be looking at the soaring stock market and wondering if now is a good time to try and get in on the action. Leaping into the market without proper research or a solid plan may leave the investor on the short end of the stick. Creating a stock investing plan can be as simple or complex as the individual chooses. Sometimes, keeping things simple may be the best way to go. Other times, there may be more than meets the eye, and a deep-dive into the crucial data may be required. New investors may be extremely excited to start buying stocks. They may have heard some great water cooler talk about the next big stock. There is always a possibility that the hot stock chatter may end up coming to fruition, but it could just as likely turn out to be terribly erroneous. Many individuals in the financial world will be quick to provide these can’t lose picks, but until this information is thoroughly researched, investors may want to proceed with caution.

Big organizations that control vast sums of money, such as mutual funds, insurance companies or pension funds, that buy securities are known as “institutional investors”.  Unlike individual investors, institutional investors trade in massive blocks of 10,000 or more shares per transaction.  The sheer size of these trades significantly affect the price of a share. 

TECHNICAL ANALYSIS

Technical analysts have little regard for the value of a company. They use historic price data to observe stock price patterns to predict the direction of that price going forward.  Analysts use common formulas and ratios to accomplish this.

The Providence Service Corporation (NASDAQ:PRSC)’s RSI (Relative Strength Index) is 64.32.  RSI is a technical indicator of price momentum, comparing the size of recent gains to the size of recent losses and establishes oversold and overbought positions.

FUNDAMENTAL ANALYSIS

Fundamental analysis examines the financial elements of a company, for example; sales, cash flow, profit and balance sheet.  These numbers are then crunched to create theoretical valuations of companies. 

Earnings Per Share (EPS) is the earnings made by a company divided by their number of shares.  EPS enables the earnings of a company to easily be compared to their competitors. The higher the number, the more profit per dollar is being made on investor capital.  The Providence Service Corporation’s EPS is 1.26.  Their EPS should be compared to other companies in the Healthcare sector.

Price-to-Earnings Ratio is the current share price divided by annual earnings per share.  P/E provides a number that details how many years of earnings it will take a stock to recoup the value of one share at current price levels.  Easy to calculate and understand, P/E is an extremely common ratio that is used to compare valuations of stocks against each other relatively.  The Providence Service Corporation’s  P/E ratio is 55.25. 

Projected Earnings Growth (PEG) is a forward looking ratio based on anticipated earnings growth.  PEG is created by dividing P/E by the projected rate of earnings growth.  The Providence Service Corporation’s  PEG is 4.60.

RETURNS AND RECOMMENDATION

Shareholders can expect a return on equity of 11.70%.  Calculated by dividing The Providence Service Corporation’s annual earnings by its total assets, investors will note a return on assets of 5.20%.  Finally, The Providence Service Corporation’s return on investment stands at 3.60% when you divide the shareholder’s return by the cost. 

The consensus analysts recommendation at this point stands at 2.00 for The Providence Service Corporation (NASDAQ:PRSC).  This is based on a 1-5 scale where 1 indicates a Strong Buy and 5 a Strong Sell.

Disclaimer: The views, opinions, and information expressed in this article are those of the authors and do not necessarily reflect the official policy or position of any company stakeholders, financial professionals, or analysts. Examples of analysis performed within this article are only examples. They should not be utilized to make stock portfolio or financial decisions as they are based only on limited and open source information. Assumptions made within the analysis are not reflective of the position of any analysts or financial professionals.