Today's Strong And Under The Radar Stock: Eagle Materials (EXP)

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

  • EXP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $51.1 million.
  • EXP is making at least a new 3-day high.
  • EXP has a PE ratio of 38.1.
  • EXP is mentioned 0.81 times per day on StockTwits.
  • EXP has not yet been mentioned on StockTwits today.
  • EXP is currently in the upper 20% of its 1-year range.
  • EXP is in the upper 35% of its 20-day range.
  • EXP is in the upper 45% of its 5-day range.
  • EXP 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 EXP:

Eagle Materials Inc. manufactures and distributes building products used in residential, industrial, commercial, and infrastructure construction in the United States. The company operates in four segments: Cement, Gypsum Wallboard, Recycled Paperboard, and Concrete and Aggregates. The stock currently has a dividend yield of 0.4%. EXP has a PE ratio of 38.1. Currently there are 2 analysts that rate Eagle Materials a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Eagle Materials has been 552,300 shares per day over the past 30 days. Eagle has a market cap of $5.1 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.76 and a short float of 3.6% with 4.55 days to cover. Shares are up 31.3% year-to-date as of the close of trading on Tuesday.

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 Eagle Materials 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, notable return on equity, solid stock price performance and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.3%. Since the same quarter one year prior, revenues rose by 17.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.42, 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 1.15, which illustrates the ability to avoid short-term cash problems.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Construction Materials industry and the overall market, EAGLE MATERIALS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 55.60% over the past year, a rise that has exceeded that of the S&P 500 Index. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • EAGLE MATERIALS INC has improved earnings per share by 25.0% 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, EAGLE MATERIALS INC increased its bottom line by earning $2.48 versus $1.24 in the prior year. This year, the market expects an improvement in earnings ($3.60 versus $2.48).

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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