Trade-Ideas LLC identified

Adtran

(

ADTN

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

  • ADTN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.3 million.
  • ADTN has traded 223.4180000000000063664629124104976654052734375 options contracts today.
  • ADTN is making at least a new 3-day high.
  • ADTN has a PE ratio of 55.
  • ADTN is mentioned 0.94 times per day on StockTwits.
  • ADTN has not yet been mentioned on StockTwits today.
  • ADTN is currently in the upper 20% of its 1-year range.
  • ADTN is in the upper 35% of its 20-day range.
  • ADTN is in the upper 45% of its 5-day range.
  • ADTN 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.

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More details on ADTN:

ADTRAN, Inc. manufactures and sells networking and communications equipment worldwide. It operates in two divisions, Carrier Networks and Enterprise Networks. The stock currently has a dividend yield of 1.8%. ADTN has a PE ratio of 55. Currently there are 6 analysts that rate Adtran a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Adtran has been 636,000 shares per day over the past 30 days. Adtran has a market cap of $955.2 million and is part of the technology sector and telecommunications industry. Shares are up 12.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Adtran as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and disappointing return on equity.

Highlights from the ratings report include:

  • ADTN's debt-to-equity ratio is very low at 0.06 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, ADTN has a quick ratio of 2.27, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.4%. Since the same quarter one year prior, revenues slightly dropped by 3.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • 47.42% is the gross profit margin for ADTRAN INC which we consider to be strong. Regardless of ADTN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ADTN's net profit margin of 4.11% is significantly lower than the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Communications Equipment industry. The net income has significantly decreased by 38.5% when compared to the same quarter one year ago, falling from $9.29 million to $5.72 million.
  • Net operating cash flow has significantly decreased to -$4.72 million or 131.86% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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