Trade-Ideas LLC identified

SPS Commerce

(

SPSC

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

  • SPSC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.9 million.
  • SPSC has traded 12.7312999999999991729282555752433836460113525390625 options contracts today.
  • SPSC is making at least a new 3-day high.
  • SPSC has a PE ratio of 435.
  • SPSC is mentioned 0.90 times per day on StockTwits.
  • SPSC has not yet been mentioned on StockTwits today.
  • SPSC is currently in the upper 20% of its 1-year range.
  • SPSC is in the upper 35% of its 20-day range.
  • SPSC is in the upper 45% of its 5-day range.
  • SPSC 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 SPSC:

SPS Commerce, Inc. provides cloud-based supply chain management solutions worldwide. It provides solutions through the SPS Commerce platform, a cloud-based product suite that improves the way suppliers, retailers, distributors, and other customers manage and fulfill orders. SPSC has a PE ratio of 435. Currently there are 6 analysts that rate SPS Commerce a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for SPS Commerce has been 88,800 shares per day over the past 30 days. SPS has a market cap of $1.2 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.58 and a short float of 5.7% with 8.11 days to cover. Shares are up 32.6% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates SPS Commerce as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in net income. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 6.8%. Since the same quarter one year prior, revenues rose by 24.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • SPSC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 5.81, which clearly demonstrates the ability to cover short-term cash needs.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Internet Software & Services industry average. The net income increased by 1.9% when compared to the same quarter one year prior, going from $0.64 million to $0.65 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, SPS COMMERCE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$0.68 million or 119.95% 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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