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

  • HDB has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $63.5 million.
  • HDB is making at least a new 3-day high.
  • HDB has a PE ratio of 31.9.
  • HDB is mentioned 1.26 times per day on StockTwits.
  • HDB has not yet been mentioned on StockTwits today.
  • HDB is currently in the upper 20% of its 1-year range.
  • HDB is in the upper 35% of its 20-day range.
  • HDB is in the upper 45% of its 5-day range.
  • HDB 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 HDB:

HDFC Bank Limited, together with its subsidiaries, provides a range of banking and financial services to individuals and businesses in India, as well as in Bahrain and Hong Kong. The company operates in four segments: Retail Banking, Wholesale Banking, Treasury, and Other Banking Operations. The stock currently has a dividend yield of 0.6%. HDB has a PE ratio of 31.9. Currently there are 2 analysts that rate HDFC Bank a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for HDFC Bank has been 813,700 shares per day over the past 30 days. HDFC has a market cap of $41.3 billion and is part of the financial sector and banking industry. Shares are up 9.7% year-to-date as of the close of trading on Thursday.

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 HDFC Bank as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.1%. Since the same quarter one year prior, revenues rose by 20.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 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. In comparison to the other companies in the Commercial Banks industry and the overall market, HDFC BANK LTD's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • HDFC BANK LTD has improved earnings per share by 21.1% in the most recent quarter compared to the same quarter a year ago. 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, HDFC BANK LTD increased its bottom line by earning $1.83 versus $1.56 in the prior year. This year, the market expects an improvement in earnings ($2.07 versus $1.83).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Commercial Banks industry average. The net income increased by 23.8% when compared to the same quarter one year prior, going from $301.62 million to $373.43 million.
  • The gross profit margin for HDFC BANK LTD is rather high; currently it is at 54.42%. 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 17.14% 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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