Continental Building Products (CBPX) 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.

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

  • CBPX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.6 million.
  • CBPX is making at least a new 3-day high.
  • CBPX is mentioned 1.39 times per day on StockTwits.
  • CBPX has not yet been mentioned on StockTwits today.
  • CBPX is currently in the upper 20% of its 1-year range.
  • CBPX is in the upper 35% of its 20-day range.
  • CBPX is in the upper 45% of its 5-day range.
  • CBPX 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 CBPX:

Continental Building Products, Inc. manufactures and sells gypsum wallboard and complementary finishing products in the eastern United States and eastern Canada. Currently there are 4 analysts that rate Continental Building Products a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Continental Building Products has been 286,900 shares per day over the past 30 days. Continental Building has a market cap of $986.6 million and is part of the industrial goods sector and materials & construction industry. Shares are up 26.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Continental Building Products as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:
  • 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.
  • CBPX's revenue growth has slightly outpaced the industry average of 0.8%. Since the same quarter one year prior, revenues slightly increased by 5.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CONTINENTAL BUILDING PRODS reported significant earnings per share improvement 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CONTINENTAL BUILDING PRODS increased its bottom line by earning $0.37 versus $0.15 in the prior year. This year, the market expects an improvement in earnings ($1.04 versus $0.37).
  • Even though the current debt-to-equity ratio is 1.15, it is still below the industry average, suggesting that this level of debt is acceptable within the Building Products industry. Despite the fact that CBPX's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.55 is high and demonstrates strong liquidity.
  • When compared to other companies in the Building Products industry and the overall market, CONTINENTAL BUILDING PRODS's return on equity is below that of both the industry average and the S&P 500.

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