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

Tile Shop Holdings

(

TTS

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

  • TTS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.7 million
  • TTS is making at least a new 3-day high
  • TTS has a PE ratio of 71
  • TTS is mentioned 0.45 times per day on StockTwits
  • TTS has not yet been mentioned on StockTwits today
  • TTS is currently in the upper 20% of its 1-year range
  • TTS is in the upper 35% of its 20-day range
  • TTS is in the upper 45% of its 5-day range
  • TTS 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 TTS:

Tile Shop Holdings, Inc. operates as a specialty retailer of manufactured and natural stone tiles, setting and maintenance materials, and related accessories in the United States. TTS has a PE ratio of 71. Currently there are two analysts that rate Tile Shop Holdings a buy, no analysts rate it a sell, and two rate it a hold.

The average volume for Tile Shop Holdings has been 431,300 shares per day over the past 30 days. Tile Shop has a market cap of $763.6 million and is part of the services sector and retail industry. The stock has a beta of 2.56 and a short float of 24.3% with 27.45 days to cover. Shares are up 67.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Tile Shop Holdings as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and deteriorating net income.

Highlights from the ratings report include:

  • TTS's revenue growth has slightly outpaced the industry average of 9.2%. Since the same quarter one year prior, revenues rose by 13.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • Net operating cash flow has significantly increased by 71.80% to $26.13 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 29.97%.
  • The debt-to-equity ratio is somewhat low, currently at 0.76, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.32 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • 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. In comparison to the other companies in the Specialty Retail industry and the overall market, TILE SHOP HOLDINGS INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • TTS has underperformed the S&P 500 Index, declining 10.63% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

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