Today's Strong And Under The Radar Stock Is Griffon (GFF)

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.

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

  • GFF has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.4 million.
  • GFF is making at least a new 3-day high.
  • GFF has a PE ratio of 175.1.
  • GFF is mentioned 1.71 times per day on StockTwits.
  • GFF has not yet been mentioned on StockTwits today.
  • GFF is currently in the upper 20% of its 1-year range.
  • GFF is in the upper 35% of its 20-day range.
  • GFF is in the upper 45% of its 5-day range.
  • GFF 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 GFF:

Griffon Corporation, through its wholly-owned subsidiaries, engages in home and building, telephonics, and plastics businesses. The stock currently has a dividend yield of 0.9%. GFF has a PE ratio of 175.1.

The average volume for Griffon has been 170,200 shares per day over the past 30 days. Griffon has a market cap of $918.1 million and is part of the industrial goods sector and materials & construction industry. The stock has a beta of 1.65 and a short float of 10% with 16.12 days to cover. Shares are up 31.6% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Griffon as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • GFF's revenue growth has slightly outpaced the industry average of 2.6%. Since the same quarter one year prior, revenues rose by 10.7%. 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 S&P 500 and the Building Products industry. The net income increased by 130.9% when compared to the same quarter one year prior, rising from $3.24 million to $7.47 million.
  • Net operating cash flow has significantly increased by 65.86% to -$8.43 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 22.92%.
  • Powered by its strong earnings growth of 166.66% and other important driving factors, this stock has surged by 48.92% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • GRIFFON CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GRIFFON CORP swung to a loss, reporting -$0.02 versus $0.11 in the prior year. This year, the market expects an improvement in earnings ($0.80 versus -$0.02).

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