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

  • DLR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $99.3 million.
  • DLR is making at least a new 3-day high.
  • DLR has a PE ratio of 39.3.
  • DLR is mentioned 1.70 times per day on StockTwits.
  • DLR has not yet been mentioned on StockTwits today.
  • DLR is currently in the upper 20% of its 1-year range.
  • DLR is in the upper 35% of its 20-day range.
  • DLR is in the upper 45% of its 5-day range.
  • DLR 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 DLR:

Digital Realty Trust, Inc., a real estate investment trust (REIT), through its controlling interest in Digital Realty Trust, L.P., engages in the ownership, acquisition, development, redevelopment, and management of technology-related real estate. The stock currently has a dividend yield of 4.9%. DLR has a PE ratio of 39.3. Currently there are 5 analysts that rate Digital Realty a buy, 2 analysts rate it a sell, and 7 rate it a hold.

The average volume for Digital Realty has been 1.1 million shares per day over the past 30 days. Digital has a market cap of $9.2 billion and is part of the financial sector and real estate industry. The stock has a beta of 0.11 and a short float of 17.9% with 10.48 days to cover. Shares are up 37.9% 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 Digital Realty as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, DLR's share price has jumped by 37.27%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, DLR should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.1%. Since the same quarter one year prior, revenues slightly increased by 9.0%. 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.
  • DIGITAL REALTY TRUST INC's earnings per share declined by 24.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, DIGITAL REALTY TRUST INC increased its bottom line by earning $2.10 versus $1.47 in the prior year. For the next year, the market is expecting a contraction of 54.3% in earnings ($0.96 versus $2.10).
  • The gross profit margin for DIGITAL REALTY TRUST INC is rather low; currently it is at 20.37%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 30.71% is above that of the industry average.

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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