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.

Trade-Ideas LLC identified

Deltic Timber

(

DEL

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

  • DEL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.5 million.
  • DEL is making at least a new 3-day high.
  • DEL has a PE ratio of 52.
  • DEL is mentioned 0.45 times per day on StockTwits.
  • DEL has not yet been mentioned on StockTwits today.
  • DEL is currently in the upper 20% of its 1-year range.
  • DEL is in the upper 35% of its 20-day range.
  • DEL is in the upper 45% of its 5-day range.
  • DEL 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 DEL:

Deltic Timber Corporation, a natural resources company, together with its subsidiaries, engages in the growing and harvesting of timber; and manufacturing and marketing of lumber and medium density fiberboards (MDF). The stock currently has a dividend yield of 0.6%. DEL has a PE ratio of 52.

The average volume for Deltic Timber has been 44,900 shares per day over the past 30 days. Deltic Timber has a market cap of $853.7 million and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 0.83 and a short float of 4.9% with 12.87 days to cover. Shares are down 0.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Deltic Timber as a

hold

. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:

  • Net operating cash flow has significantly increased by 149.19% to $9.23 million when compared to the same quarter last year. In addition, DELTIC TIMBER CORP has also vastly surpassed the industry average cash flow growth rate of 41.10%.
  • The debt-to-equity ratio is somewhat low, currently at 0.75, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.98 is somewhat weak and could be cause for future problems.
  • DEL, with its decline in revenue, underperformed when compared the industry average of 0.9%. Since the same quarter one year prior, revenues fell by 12.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Paper & Forest Products industry and the overall market, DELTIC TIMBER CORP's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for DELTIC TIMBER CORP is currently lower than what is desirable, coming in at 29.69%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.95% trails that of the industry average.

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