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 $5.7 million.
  • ADTN has traded 311.298000000000001818989403545856475830078125 options contracts today.
  • ADTN is making at least a new 3-day high.
  • ADTN has a PE ratio of 48.
  • ADTN is mentioned 1.26 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 1.9%. ADTN has a PE ratio of 48. Currently there are 4 analysts that rate Adtran a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Adtran has been 455,000 shares per day over the past 30 days. Adtran has a market cap of $940.7 million and is part of the technology sector and telecommunications industry. The stock has a beta of 0.77 and a short float of 5.6% with 8.65 days to cover. Shares are up 11.6% year-to-date as of the close of trading on Friday.

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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 increase in net income, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 51.2% when compared to the same quarter one year prior, rising from $3.32 million to $5.01 million.
  • 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 2.23, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • ADTN, with its decline in revenue, slightly underperformed the industry average of 0.4%. Since the same quarter one year prior, revenues slightly dropped by 0.4%. The declining revenue has not hurt the company's bottom line, with increasing 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. Compared to other companies in the Communications Equipment industry and the overall market on the basis of return on equity, ADTRAN INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

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