Don't Miss Today's Strong And Under The Radar Stock: Steris (STE)

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

  • STE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $27.1 million.
  • STE is making at least a new 3-day high.
  • STE has a PE ratio of 30.8.
  • STE is mentioned 1.29 times per day on StockTwits.
  • STE has not yet been mentioned on StockTwits today.
  • STE is currently in the upper 20% of its 1-year range.
  • STE is in the upper 35% of its 20-day range.
  • STE is in the upper 45% of its 5-day range.
  • STE 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 STE:

STERIS Corporation develops, manufactures, and markets infection prevention, contamination control, microbial reduction, and procedural support products and services for healthcare, pharmaceutical, scientific, research, industrial, and governmental customers worldwide. The stock currently has a dividend yield of 1.4%. STE has a PE ratio of 30.8. Currently there are 3 analysts that rate Steris a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Steris has been 518,600 shares per day over the past 30 days. Steris has a market cap of $3.8 billion and is part of the health care sector and health services industry. The stock has a beta of 1.41 and a short float of 8.1% with 11.79 days to cover. Shares are up 35.7% 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.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Steris as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, reasonable valuation levels, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 7.0%. Since the same quarter one year prior, revenues rose by 20.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 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 40.23% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, STE should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has increased to $58.56 million or 23.66% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 1.27%.
  • 47.78% is the gross profit margin for STERIS CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.70% trails 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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