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Today's Strong And Under The Radar Stock: Beam (BEAM)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Beam (BEAM) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Beam as such a stock due to the following factors:

  • BEAM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $159.9 million.
  • BEAM is making at least a new 3-day high.
  • BEAM has a PE ratio of 37.1.
  • BEAM is mentioned 0.68 times per day on StockTwits.
  • BEAM has not yet been mentioned on StockTwits today.
  • BEAM is currently in the upper 20% of its 1-year range.
  • BEAM is in the upper 35% of its 20-day range.
  • BEAM is in the upper 45% of its 5-day range.
  • BEAM is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in BEAM with the Ticky from Trade-Ideas. See the FREE profile for BEAM NOW at Trade-Ideas

More details on BEAM:

Beam Inc. manufactures and sells distilled spirits. The company's principal products include bourbon whiskey, tequila, Scotch whisky, Canadian whisky, vodka, cognac, rum, cordials, and ready-to-drink pre-mixed cocktails. The stock currently has a dividend yield of 1.1%. BEAM has a PE ratio of 37.1. Currently there are 2 analysts that rate Beam a buy, 2 analysts rate it a sell, and 5 rate it a hold.

The average volume for Beam has been 3.4 million shares per day over the past 30 days. Beam has a market cap of $13.8 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 0.53 and a short float of 1.8% with 1.54 days to cover. Shares are up 22.3% year-to-date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Beam as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • BEAM's revenue growth has slightly outpaced the industry average of 3.9%. Since the same quarter one year prior, revenues slightly increased by 4.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $309.70 million or 16.60% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.22%.
  • The current debt-to-equity ratio, 0.40, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 1.00 is somewhat weak and could be cause for future problems.
  • Compared to its closing price of one year ago, BEAM's share price has jumped by 33.04%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • The gross profit margin for BEAM INC is rather high; currently it is at 59.86%. Regardless of BEAM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 12.21% trails the industry average.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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