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

Meridian Bancorp

(

EBSB

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

  • EBSB has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.7 million.
  • EBSB is making at least a new 3-day high.
  • EBSB has a PE ratio of 31.0.
  • EBSB is mentioned 0.68 times per day on StockTwits.
  • EBSB has not yet been mentioned on StockTwits today.
  • EBSB is currently in the upper 20% of its 1-year range.
  • EBSB is in the upper 35% of its 20-day range.
  • EBSB is in the upper 45% of its 5-day range.
  • EBSB 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 EBSB:

Meridian Bancorp, Inc. operates as a holding company for East Boston Savings Bank that provides financial services to individuals and businesses primarily in Suffolk, Middlesex, and Essex Counties, Massachusetts. EBSB has a PE ratio of 31.0. Currently there is 1 analyst that rates Meridian Bancorp a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Meridian Bancorp has been 173,000 shares per day over the past 30 days. Meridian has a market cap of $714.7 million and is part of the financial sector and banking industry. The stock has a beta of 0.40 and a short float of 2.9% with 3.04 days to cover. Shares are up 16.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Meridian Bancorp as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, expanding profit margins, solid stock price performance and compelling growth in net income. We feel these 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 5.5%. Since the same quarter one year prior, revenues slightly increased by 9.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • MERIDIAN BANCORP INC (MD) has improved earnings per share by 49.6% 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, MERIDIAN BANCORP INC (MD) increased its bottom line by earning $0.41 versus $0.29 in the prior year. This year, the market expects an improvement in earnings ($0.47 versus $0.41).
  • The gross profit margin for MERIDIAN BANCORP INC (MD) is currently very high, coming in at 78.61%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 18.16% trails the industry average.
  • 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. Looking ahead, the stock's 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 the other strengths this company displays justify these higher price levels.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Thrifts & Mortgage Finance industry average, but is greater than that of the S&P 500. The net income increased by 50.4% when compared to the same quarter one year prior, rising from $4.02 million to $6.04 million.

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