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

  • DDC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.5 million.
  • DDC is making at least a new 3-day high.
  • DDC has a PE ratio of 52.0.
  • DDC is mentioned 0.84 times per day on StockTwits.
  • DDC has not yet been mentioned on StockTwits today.
  • DDC is currently in the upper 20% of its 1-year range.
  • DDC is in the upper 35% of its 20-day range.
  • DDC is in the upper 45% of its 5-day range.
  • DDC 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 DDC:

Dominion Diamond Corporation focuses on the mining and marketing of rough diamonds worldwide. The company operates through Diavik Diamond Mine, Ekati Diamond Mine, and Corporate segments. DDC has a PE ratio of 52.0. Currently there are 3 analysts that rate Dominion Diamond a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Dominion Diamond has been 384,100 shares per day over the past 30 days. Dominion has a market cap of $1.5 billion and is part of the basic materials sector and metals & mining industry. Shares are up 22.4% 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 Dominion Diamond as a buy. 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, increase in net income, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • DDC's revenue growth has slightly outpaced the industry average of 3.4%. Since the same quarter one year prior, revenues slightly increased by 5.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • DDC's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, DDC has a quick ratio of 1.61, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 291.5% when compared to the same quarter one year prior, rising from -$13.88 million to $26.59 million.
  • 42.86% is the gross profit margin for DOMINION DIAMOND CORP which we consider to be strong. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.58% trails the industry average.
  • 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. When compared to other companies in the Metals & Mining industry and the overall market, DOMINION DIAMOND CORP's return on equity has significantly outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

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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