Trade-Ideas LLC identified

SPS Commerce

(

SPSC

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

  • SPSC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.6 million.
  • SPSC has traded 11.9701000000000004064304448547773063182830810546875 options contracts today.
  • SPSC is making at least a new 3-day high.
  • SPSC has a PE ratio of 363.
  • SPSC is mentioned 1.29 times per day on StockTwits.
  • SPSC has not yet been mentioned on StockTwits today.
  • SPSC is currently in the upper 20% of its 1-year range.
  • SPSC is in the upper 35% of its 20-day range.
  • SPSC is in the upper 45% of its 5-day range.
  • SPSC 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 SPSC:

SPS Commerce, Inc. provides cloud-based supply chain management solutions worldwide. It provides solutions through the SPS Commerce platform, a cloud-based product suite that improves the way suppliers, retailers, distributors, and other customers manage and fulfill orders. SPSC has a PE ratio of 363. Currently there are 6 analysts that rate SPS Commerce a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for SPS Commerce has been 80,300 shares per day over the past 30 days. SPS has a market cap of $1.2 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.38 and a short float of 5.5% with 9.18 days to cover. Shares are up 28% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates SPS Commerce as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, 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:

  • SPSC's revenue growth has slightly outpaced the industry average of 15.1%. Since the same quarter one year prior, revenues rose by 24.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • SPSC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 6.01, which clearly demonstrates the ability to cover short-term cash needs.
  • SPS COMMERCE INC has improved earnings per share by 40.0% 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, SPS COMMERCE INC increased its bottom line by earning $0.16 versus $0.07 in the prior year. This year, the market expects an improvement in earnings ($0.78 versus $0.16).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Internet Software & Services industry average. The net income increased by 51.5% when compared to the same quarter one year prior, rising from $0.84 million to $1.27 million.
  • 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.

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