Strong And Under The Radar Today: TRW Automotive Holdings (TRW)

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

  • TRW has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $71.1 million.
  • TRW is making at least a new 3-day high.
  • TRW has a PE ratio of 41.4.
  • TRW is mentioned 0.87 times per day on StockTwits.
  • TRW has not yet been mentioned on StockTwits today.
  • TRW is currently in the upper 20% of its 1-year range.
  • TRW is in the upper 35% of its 20-day range.
  • TRW is in the upper 45% of its 5-day range.
  • TRW 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 TRW:

TRW Automotive Holdings Corp., through its subsidiaries, designs, manufactures, and sells automotive systems, modules, and components to automotive original equipment manufacturers (OEMs) and related aftermarkets. TRW has a PE ratio of 41.4. Currently there are 2 analysts that rate TRW Automotive Holdings a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for TRW Automotive Holdings has been 995,700 shares per day over the past 30 days. TRW Automotive has a market cap of $12.1 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 0.65 and a short float of 1.2% with 2.03 days to cover. Shares are up 2.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates TRW Automotive Holdings as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, TRW's share price has jumped by 28.91%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp 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 other strengths this company displays justify these higher price levels.
  • The current debt-to-equity ratio, 0.41, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.80 is somewhat weak and could be cause for future problems.
  • TRW AUTOMOTIVE HOLDINGS CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, TRW AUTOMOTIVE HOLDINGS CORP reported lower earnings of $2.34 versus $7.88 in the prior year. This year, the market expects an improvement in earnings ($7.90 versus $2.34).
  • TRW, with its decline in revenue, slightly underperformed the industry average of 0.9%. Since the same quarter one year prior, revenues slightly dropped by 3.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for TRW AUTOMOTIVE HOLDINGS CORP is currently extremely low, coming in at 14.51%. Regardless of TRW's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, TRW's net profit margin of -8.27% significantly underperformed when compared to the industry average.

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