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

  • SRCL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $37.7 million.
  • SRCL is making at least a new 3-day high.
  • SRCL has a PE ratio of 34.3.
  • SRCL is mentioned 1.90 times per day on StockTwits.
  • SRCL has not yet been mentioned on StockTwits today.
  • SRCL is currently in the upper 20% of its 1-year range.
  • SRCL is in the upper 35% of its 20-day range.
  • SRCL is in the upper 45% of its 5-day range.
  • SRCL 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 SRCL:

Stericycle, Inc., together with its subsidiaries, provides regulated and compliance solutions to the healthcare and commercial businesses. The company collects and processes specialized waste for disposal services. SRCL has a PE ratio of 34.3. Currently there are 10 analysts that rate Stericycle a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Stericycle has been 357,600 shares per day over the past 30 days. Stericycle has a market cap of $10.8 billion and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 0.36 and a short float of 3.1% with 8.66 days to cover. Shares are up 9.7% 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 Stericycle as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, growth in earnings per share, increase in stock price during the past year and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 8.3%. Since the same quarter one year prior, revenues rose by 24.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Commercial Services & Supplies industry average, but is less than that of the S&P 500. The net income increased by 2.9% when compared to the same quarter one year prior, going from $80.55 million to $82.85 million.
  • STERICYCLE INC's earnings per share improvement from the most recent quarter was slightly positive. 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, STERICYCLE INC increased its bottom line by earning $3.56 versus $3.08 in the prior year. This year, the market expects an improvement in earnings ($4.27 versus $3.56).
  • The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • The debt-to-equity ratio is somewhat low, currently at 0.90, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.97 is somewhat weak and could be cause for future problems.

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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