Trade-Ideas LLC identified

Beacon Roofing Supply

(

BECN

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

  • BECN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $20.8 million.
  • BECN has traded 31.970099999999998630073605454526841640472412109375 options contracts today.
  • BECN is making at least a new 3-day high.
  • BECN has a PE ratio of 33.
  • BECN is mentioned 1.65 times per day on StockTwits.
  • BECN has not yet been mentioned on StockTwits today.
  • BECN is currently in the upper 20% of its 1-year range.
  • BECN is in the upper 35% of its 20-day range.
  • BECN is in the upper 45% of its 5-day range.
  • BECN 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 BECN:

Beacon Roofing Supply, Inc., together with its subsidiaries, distributes residential and non-residential roofing materials, and other complementary building materials to contractors, home builders, building owners, and other resellers. BECN has a PE ratio of 33. Currently there are 5 analysts that rate Beacon Roofing Supply a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Beacon Roofing Supply has been 394,600 shares per day over the past 30 days. Beacon Roofing Supply has a market cap of $2.4 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.47 and a short float of 5.4% with 4.78 days to cover. Shares are up 48.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Beacon Roofing Supply as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, compelling growth in net income and solid stock price performance. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 2.7%. Since the same quarter one year prior, revenues slightly increased by 8.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • BECN's debt-to-equity ratio is very low at 0.25 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.12, which illustrates the ability to avoid short-term cash problems.
  • BEACON ROOFING SUPPLY INC has improved earnings per share by 27.1% 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 year. We feel that this trend should continue. During the past fiscal year, BEACON ROOFING SUPPLY INC increased its bottom line by earning $1.23 versus $1.07 in the prior year. This year, the market expects an improvement in earnings ($1.82 versus $1.23).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Trading Companies & Distributors industry. The net income increased by 27.3% when compared to the same quarter one year prior, rising from $24.21 million to $30.81 million.
  • Powered by its strong earnings growth of 27.08% and other important driving factors, this stock has surged by 46.67% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.

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