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

Pepco Holdings

(

POM

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

  • POM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $36.6 million.
  • POM has traded 357.6870000000000118234311230480670928955078125 options contracts today.
  • POM is making at least a new 3-day high.
  • POM has a PE ratio of 31.
  • POM is mentioned 1.42 times per day on StockTwits.
  • POM has not yet been mentioned on StockTwits today.
  • POM is currently in the upper 20% of its 1-year range.
  • POM is in the upper 35% of its 20-day range.
  • POM is in the upper 45% of its 5-day range.
  • POM 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 POM:

Pepco Holdings, Inc., through its subsidiaries, engages in the transmission, distribution, and supply of electricity. The company also distributes and supplies natural gas. The stock currently has a dividend yield of 4.1%. POM has a PE ratio of 31. Currently there are no analysts that rate Pepco Holdings a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Pepco Holdings has been 1.8 million shares per day over the past 30 days. Pepco has a market cap of $6.7 billion and is part of the utilities sector and utilities industry. The stock has a beta of 0.26 and a short float of 2.7% with 4.97 days to cover. Shares are down 0.2% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Pepco Holdings as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth and good cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 3.6%. Since the same quarter one year prior, revenues slightly increased by 2.0%. 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 increased to $182.00 million or 34.81% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 16.26%.
  • PEPCO HOLDINGS INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PEPCO HOLDINGS INC increased its bottom line by earning $0.96 versus $0.41 in the prior year. This year, the market expects an improvement in earnings ($1.30 versus $0.96).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Electric Utilities industry average, but is greater than that of the S&P 500. The net income has remained constant at $53.00 million when compared to the same quarter one year ago.
  • In its most recent trading session, POM has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Despite the decline in its share price over the last year, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry. We feel, however, that other strengths this company displays compensate for this.

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