Strong And Under The Radar Today: Targa Resources (TRGP)

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

  • TRGP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $30.5 million.
  • TRGP is making at least a new 3-day high.
  • TRGP has a PE ratio of 71.9.
  • TRGP is mentioned 1.29 times per day on StockTwits.
  • TRGP has not yet been mentioned on StockTwits today.
  • TRGP is currently in the upper 20% of its 1-year range.
  • TRGP is in the upper 35% of its 20-day range.
  • TRGP is in the upper 45% of its 5-day range.
  • TRGP 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 TRGP:

Targa Resources Corp., through its general and limited partner interests in Targa Resources Partners LP, provides midstream natural gas and natural gas liquid (NGL) services in the United States. The company operates in two divisions, Gathering and Processing, and Logistics and Marketing. The stock currently has a dividend yield of 1.9%. TRGP has a PE ratio of 71.9. Currently there are 7 analysts that rate Targa Resources a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Targa Resources has been 445,100 shares per day over the past 30 days. Targa has a market cap of $6.0 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.01 and a short float of 4.6% with 1.48 days to cover. Shares are up 60.1% 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 Targa Resources as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, good cash flow from operations, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 3.5%. Since the same quarter one year prior, revenues rose by 43.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • TARGA RESOURCES CORP reported significant earnings per share improvement 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, TARGA RESOURCES CORP increased its bottom line by earning $1.55 versus $0.92 in the prior year. This year, the market expects an improvement in earnings ($2.60 versus $1.55).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 77.2% when compared to the same quarter one year prior, rising from $14.90 million to $26.40 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, TARGA RESOURCES CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 1036.28% to $105.80 million when compared to the same quarter last year. In addition, TARGA RESOURCES CORP has also vastly surpassed the industry average cash flow growth rate of -5.22%.

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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