Strong And Under The Radar Today: Cognex (CGNX)

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

  • CGNX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $17.5 million.
  • CGNX is making at least a new 3-day high.
  • CGNX has a PE ratio of 44.3.
  • CGNX is mentioned 0.68 times per day on StockTwits.
  • CGNX has not yet been mentioned on StockTwits today.
  • CGNX is currently in the upper 20% of its 1-year range.
  • CGNX is in the upper 35% of its 20-day range.
  • CGNX is in the upper 45% of its 5-day range.
  • CGNX 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 CGNX:

Cognex Corporation provides machine vision products that capture and analyze visual information in order to automate tasks primarily in manufacturing processes. It operates in two divisions, Modular Vision Systems and Surface Inspection Systems. CGNX has a PE ratio of 44.3. Currently there is 1 analyst that rates Cognex a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Cognex has been 527,700 shares per day over the past 30 days. Cognex has a market cap of $3.7 billion and is part of the technology sector and electronics industry. The stock has a beta of 1.37 and a short float of 3.1% with 6.50 days to cover. Shares are up 10.6% year-to-date as of the close of trading on Friday.

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

TheStreet Quant Ratings rates Cognex 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 expanding profit margins. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 3.6%. Since the same quarter one year prior, revenues rose by 25.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CGNX 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 2.61, which clearly demonstrates the ability to cover short-term cash needs.
  • COGNEX 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, COGNEX CORP increased its bottom line by earning $0.83 versus $0.78 in the prior year. This year, the market expects an improvement in earnings ($1.32 versus $0.83).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income increased by 54.3% when compared to the same quarter one year prior, rising from $16.82 million to $25.95 million.
  • The gross profit margin for COGNEX CORP is currently very high, coming in at 79.03%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 23.84% significantly outperformed against the industry average.


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