Sensient Technologies (SXT) Is Today's Strong And Under The Radar Stock

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 or Stephanie Link.

Trade-Ideas LLC identified Sensient Technologies ( SXT) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Sensient Technologies as such a stock due to the following factors:

  • SXT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $10.1 million.
  • SXT is making at least a new 3-day high.
  • SXT has a PE ratio of 31.4.
  • SXT is mentioned 1.06 times per day on StockTwits.
  • SXT has not yet been mentioned on StockTwits today.
  • SXT is currently in the upper 20% of its 1-year range.
  • SXT is in the upper 35% of its 20-day range.
  • SXT is in the upper 45% of its 5-day range.
  • SXT 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 SXT:

Sensient Technologies Corporation manufactures and markets colors, flavors, and fragrances in the United States and internationally. The company operates in two segments, the Flavors and Fragrances Group, and the Color Group. The stock currently has a dividend yield of 1.8%. SXT has a PE ratio of 31.4. Currently there are 2 analysts that rate Sensient Technologies a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Sensient Technologies has been 195,800 shares per day over the past 30 days. Sensient has a market cap of $2.6 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.01 and a short float of 2.2% with 4.97 days to cover. Shares are up 13.9% year-to-date as of the close of trading on Monday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Sensient Technologies as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.43, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.18, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has increased to $49.60 million or 11.58% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -15.43%.
  • 38.07% is the gross profit margin for SENSIENT TECHNOLOGIES CORP which we consider to be strong. 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 7.75% trails the industry average.
  • Compared to its closing price of one year ago, SXT's share price has jumped by 31.71%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp 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 other strengths this company displays justify these higher price levels.
  • SENSIENT TECHNOLOGIES CORP's earnings per share declined by 9.2% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, SENSIENT TECHNOLOGIES CORP reported lower earnings of $2.27 versus $2.49 in the prior year. This year, the market expects an improvement in earnings ($2.98 versus $2.27).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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