Strong And Under The Radar: Globe Specialty Metals (GSM)

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

  • GSM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.0 million.
  • GSM is making at least a new 3-day high.
  • GSM has a PE ratio of 103.0.
  • GSM is mentioned 0.81 times per day on StockTwits.
  • GSM has not yet been mentioned on StockTwits today.
  • GSM is currently in the upper 20% of its 1-year range.
  • GSM is in the upper 35% of its 20-day range.
  • GSM is in the upper 45% of its 5-day range.
  • GSM 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 GSM:

Globe Specialty Metals, Inc. produces and sells silicon metal and silicon-based alloys in the United State, Argentina, Canada, China, and Poland. The company operates through GMI, Globe Metales, Solsil, and Other segments. The stock currently has a dividend yield of 1.5%. GSM has a PE ratio of 103.0. Currently there are 4 analysts that rate Globe Specialty Metals a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Globe Specialty Metals has been 310,700 shares per day over the past 30 days. Globe Specialty has a market cap of $1.4 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 1.88 and a short float of 2.8% with 3.94 days to cover. Shares are up 10.2% 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 Globe Specialty Metals as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and poor profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.6%. Since the same quarter one year prior, revenues rose by 13.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, GSM has a quick ratio of 2.28, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, GLOBE SPECIALTY METALS INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Net operating cash flow has decreased to $21.34 million or 35.30% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 36.1% when compared to the same quarter one year ago, falling from $9.74 million to $6.23 million.

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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