Alliance Data Systems Co. (NYSE:ADS) Short Interest Up 111.5% in August

Alliance Data Systems Co. (NYSE:ADS) was the target of a large growth in short interest in August. As of August 31st, there was short interest totalling 4,036,200 shares, a growth of 111.5% from the July 31st total of 1,908,700 shares. Currently, 8.1% of the shares of the stock are sold short. Based on an average daily volume of 972,300 shares, the days-to-cover ratio is presently 4.2 days.

Shares of NYSE ADS traded up $3.09 during mid-day trading on Wednesday, reaching $135.37. 877,998 shares of the company were exchanged, compared to its average volume of 818,884. Alliance Data Systems has a 52 week low of $118.40 and a 52 week high of $250.27. The company has a quick ratio of 2.64, a current ratio of 2.67 and a debt-to-equity ratio of 7.16. The stock has a market capitalization of $6.59 billion, a PE ratio of 6.28, a PEG ratio of 0.47 and a beta of 1.70. The company’s 50 day moving average price is $140.98 and its 200 day moving average price is $152.17.

Alliance Data Systems (NYSE:ADS) last announced its earnings results on Thursday, July 18th. The business services provider reported $3.66 earnings per share (EPS) for the quarter, missing the consensus estimate of $4.08 by ($0.42). The company had revenue of $1.35 billion during the quarter, compared to analysts’ expectations of $1.36 billion. Alliance Data Systems had a return on equity of 46.72% and a net margin of 13.01%. The firm’s revenue was down 3.5% on a year-over-year basis. During the same quarter last year, the firm posted $5.01 earnings per share. On average, sell-side analysts predict that Alliance Data Systems will post 18.95 earnings per share for the current year.

The company also recently declared a quarterly dividend, which will be paid on Thursday, September 26th. Shareholders of record on Wednesday, September 4th will be paid a dividend of $0.63 per share. This represents a $2.52 annualized dividend and a yield of 1.86%. The ex-dividend date is Tuesday, September 3rd. Alliance Data Systems’s dividend payout ratio (DPR) is currently 11.69%.

Alliance Data Systems declared that its Board of Directors has approved a stock repurchase plan on Tuesday, July 9th that permits the company to buyback $1.10 billion in outstanding shares. This buyback authorization permits the business services provider to repurchase up to 14.2% of its stock through open market purchases. Stock buyback plans are generally a sign that the company’s management believes its shares are undervalued.

ADS has been the topic of several research analyst reports. Robert W. Baird set a $173.00 price target on shares of Alliance Data Systems and gave the stock a “hold” rating in a report on Friday, July 19th. UBS Group raised Alliance Data Systems from a “neutral” rating to a “buy” rating and dropped their price objective for the company from $160.00 to $155.00 in a research note on Tuesday, September 3rd. William Blair restated a “buy” rating on shares of Alliance Data Systems in a research report on Monday, July 15th. Buckingham Research restated a “neutral” rating and set a $169.00 target price on shares of Alliance Data Systems in a research report on Monday, July 22nd. Finally, Goldman Sachs Group upgraded Alliance Data Systems from a “neutral” rating to a “buy” rating and set a $152.00 target price on the stock in a research note on Wednesday. Three investment analysts have rated the stock with a sell rating, six have assigned a hold rating and eight have issued a buy rating to the company’s stock. The stock currently has an average rating of “Hold” and an average target price of $188.50.

In other Alliance Data Systems news, CFO Timothy P. King sold 2,600 shares of the firm’s stock in a transaction on Tuesday, July 30th. The shares were sold at an average price of $156.30, for a total value of $406,380.00. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. 2.80% of the stock is owned by company insiders.

Several institutional investors have recently made changes to their positions in the company. Financial Advisors Network Inc. boosted its stake in Alliance Data Systems by 43.2% in the first quarter. Financial Advisors Network Inc. now owns 6,552 shares of the business services provider’s stock worth $901,000 after buying an additional 1,977 shares in the last quarter. Artemis Investment Management LLP bought a new stake in shares of Alliance Data Systems in the 2nd quarter worth approximately $5,871,000. CIBC World Markets Inc. boosted its stake in shares of Alliance Data Systems by 11.0% in the 1st quarter. CIBC World Markets Inc. now owns 1,717 shares of the business services provider’s stock valued at $300,000 after purchasing an additional 170 shares in the last quarter. Emory University boosted its stake in shares of Alliance Data Systems by 17.2% in the 1st quarter. Emory University now owns 11,142 shares of the business services provider’s stock valued at $1,950,000 after purchasing an additional 1,633 shares in the last quarter. Finally, Mesirow Financial Investment Management Equity Management purchased a new stake in shares of Alliance Data Systems in the 2nd quarter valued at $1,408,000. Hedge funds and other institutional investors own 89.65% of the company’s stock.

About Alliance Data Systems

Alliance Data Systems Corporation provides data-driven marketing and loyalty solutions worldwide. It operates through three segments: LoyaltyOne, Epsilon, and Card Services. The company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs.

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