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

Red Robin Gourmet Burgers

(

RRGB

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

  • RRGB has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.2 million.
  • RRGB has traded 472.5670000000000072759576141834259033203125 options contracts today.
  • RRGB is making at least a new 3-day high.
  • RRGB has a PE ratio of 34.
  • RRGB is mentioned 1.94 times per day on StockTwits.
  • RRGB has not yet been mentioned on StockTwits today.
  • RRGB is currently in the upper 20% of its 1-year range.
  • RRGB is in the upper 35% of its 20-day range.
  • RRGB is in the upper 45% of its 5-day range.
  • RRGB 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 RRGB:

Red Robin Gourmet Burgers, Inc., together with its subsidiaries, develops, operates, and franchises casual-dining and fast-casual restaurants in the United States and Canada. As of December 28, 2014, it had 514 restaurants, including 415 company-owned restaurants and 99 franchised restaurants. RRGB has a PE ratio of 34. Currently there are 6 analysts that rate Red Robin Gourmet Burgers a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Red Robin Gourmet Burgers has been 265,200 shares per day over the past 30 days. Red Robin Gourmet Burgers has a market cap of $1.2 billion and is part of the services sector and leisure industry. The stock has a beta of 0.61 and a short float of 8.2% with 7.34 days to cover. Shares are up 14.2% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Red Robin Gourmet Burgers as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 5.0%. Since the same quarter one year prior, revenues rose by 15.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • RED ROBIN GOURMET BURGERS has improved earnings per share by 41.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, RED ROBIN GOURMET BURGERS increased its bottom line by earning $2.25 versus $2.23 in the prior year. This year, the market expects an improvement in earnings ($3.21 versus $2.25).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 38.7% when compared to the same quarter one year prior, rising from $11.94 million to $16.57 million.
  • The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.24 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • Powered by its strong earnings growth of 41.46% and other important driving factors, this stock has surged by 37.81% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

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