Strong And Under The Radar Today: Emergent BioSolutions (EBS)

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

  • EBS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.1 million.
  • EBS is making at least a new 3-day high.
  • EBS has a PE ratio of 33.7.
  • EBS is mentioned 1.23 times per day on StockTwits.
  • EBS has not yet been mentioned on StockTwits today.
  • EBS is currently in the upper 20% of its 1-year range.
  • EBS is in the upper 35% of its 20-day range.
  • EBS is in the upper 45% of its 5-day range.
  • EBS 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 EBS:

Emergent BioSolutions Inc., a specialty pharmaceutical company, develops, manufactures, and commercializes specialized products for use in biodefense and commercial markets in the United States and internationally. EBS has a PE ratio of 33.7. Currently there are 2 analysts that rate Emergent BioSolutions a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Emergent BioSolutions has been 262,700 shares per day over the past 30 days. Emergent BioSolutions has a market cap of $1.1 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.83 and a short float of 11.2% with 14.78 days to cover. Shares are up 12.9% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Emergent BioSolutions as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, attractive valuation levels, compelling growth in net income and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • EBS's very impressive revenue growth exceeded the industry average of 21.4%. Since the same quarter one year prior, revenues leaped by 50.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Biotechnology industry. The net income increased by 97.8% when compared to the same quarter one year prior, rising from $15.22 million to $30.12 million.
  • Net operating cash flow has significantly increased by 499.71% to $51.82 million when compared to the same quarter last year. In addition, EMERGENT BIOSOLUTIONS INC has also vastly surpassed the industry average cash flow growth rate of -4.91%.

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