I'm Buying a Play on Vital Technical and Medical Training in Front of Earnings
Earnings always adds an element of risk, but this name has a history of strong reports.
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We have strong rotational action on Thursday as the Magnificent Seven is under pressure mainly due to Microsoft MSFT and Nivida NVDA, while the Russell 2000 IWM is attracting stock pickers and is trading up 1.4%. Breadth is very strong, with around 7,200 gainers and just 1,850 decliners. The rotation action out of big-cap technology and into the broader market is very bullish.
I’m looking for some new buys, but many stocks are reporting earnings soon, and that always adds an element of risk. One name I like in front of its earnings next week is Sensus Healthcare SRTS, which I have discussed previously.
But I want to introduce a new name, which I think will have a solid earnings report as well. Universal Technical Institute UTI is a leading provider of technical training. It prepares students for careers in skilled trades.
The company has two divisions. Universal Technical Institute offers training in automobile technology, diesel mechanics, welding, wind, energy, robotics, and automation. Its Concorde Career College offers training in the medical field with training in nursing, dental assistance, surgical technology, etc.
What makes UTI unique is that it partners with potential employers that need skilled workers. Its programs are designed in collaboration with employers, and it offers state-of-the-art equipment and training.
The company believes that the Trump administration will be a boon to its business because of a better regulatory atmosphere and a focus on practical training.
In its most recent quarter, the company experienced 15% revenue growth while EPS jumped 127% to 0.34. It is anticipating EPS growth of around 25% for the next couple of years, but it has beaten estimates in three of the last four quarters.
UTI will report earnings on February 5 after the market closes.
Technically, the stock has been in a trading range since its last report, but it is now moving over the key level of $27. It trades thinly, but it has a very solid base and a history of strong earnings reports. With a better environment for trade schools, the stock is appealing.
At the time of publication, Rev Shark was long UTI and SRTS.
