Radware (RDWR) Showing Signs Of Being Strong And Under The Radar

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

  • RDWR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.8 million.
  • RDWR is making at least a new 3-day high.
  • RDWR has a PE ratio of 44.4.
  • RDWR is mentioned 2.00 times per day on StockTwits.
  • RDWR has not yet been mentioned on StockTwits today.
  • RDWR is currently in the upper 20% of its 1-year range.
  • RDWR is in the upper 35% of its 20-day range.
  • RDWR is in the upper 45% of its 5-day range.
  • RDWR 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 RDWR:

Radware Ltd. develops, manufactures, and markets application delivery and security solutions for virtual and cloud data centers worldwide. RDWR has a PE ratio of 44.4. Currently there are 5 analysts that rate Radware a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Radware has been 373,800 shares per day over the past 30 days. Radware has a market cap of $1.0 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.09 and a short float of 0.6% with 1.24 days to cover. Shares are up 21.9% 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 Radware 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 solid stock price performance. 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 5.5%. Since the same quarter one year prior, revenues rose by 18.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • RDWR has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, RDWR has a quick ratio of 2.25, 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 Communications Equipment industry. The net income increased by 167.3% when compared to the same quarter one year prior, rising from $2.90 million to $7.76 million.
  • The gross profit margin for RADWARE LTD is currently very high, coming in at 82.52%. 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 13.65% trails the industry average.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.

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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