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 Dot Hill Systems ( HILL) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Dot Hill Systems as such a stock due to the following factors:

  • HILL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.7 million.
  • HILL is making at least a new 3-day high.
  • HILL has a PE ratio of 50.9.
  • HILL is mentioned 1.58 times per day on StockTwits.
  • HILL has not yet been mentioned on StockTwits today.
  • HILL is currently in the upper 20% of its 1-year range.
  • HILL is in the upper 35% of its 20-day range.
  • HILL is in the upper 45% of its 5-day range.
  • HILL 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 HILL:

Dot Hill Systems Corp. designs, manufactures, and markets a range of software and hardware storage systems for the entry and mid-range storage markets worldwide. HILL has a PE ratio of 50.9. Currently there are 4 analysts that rate Dot Hill Systems a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Dot Hill Systems has been 311,800 shares per day over the past 30 days. Dot Hill Systems has a market cap of $402.0 million and is part of the technology sector and computer hardware industry. The stock has a beta of 1.08 and a short float of 1.6% with 2.33 days to cover. Shares are up 49.5% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Dot Hill Systems as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures 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:
  • DOT HILL SYSTEMS CORP 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 two years. We feel that this trend should continue. During the past fiscal year, DOT HILL SYSTEMS CORP increased its bottom line by earning $0.12 versus $0.10 in the prior year. This year, the market expects an improvement in earnings ($0.31 versus $0.12).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Computers & Peripherals industry. The net income increased by 284.5% when compared to the same quarter one year prior, rising from $2.21 million to $8.51 million.
  • HILL's revenue growth trails the industry average of 34.0%. Since the same quarter one year prior, revenues rose by 17.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • HILL has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, HILL has a quick ratio of 1.57, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has significantly increased by 261.39% to $2.08 million when compared to the same quarter last year. In addition, DOT HILL SYSTEMS CORP has also vastly surpassed the industry average cash flow growth rate of 49.22%.

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