Today's Strong And Under The Radar Stock Is PGT (PGTI)

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

  • PGTI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $2.6 million.
  • PGTI is making at least a new 3-day high.
  • PGTI has a PE ratio of 34.9.
  • PGTI is mentioned 1.19 times per day on StockTwits.
  • PGTI has not yet been mentioned on StockTwits today.
  • PGTI is currently in the upper 20% of its 1-year range.
  • PGTI is in the upper 35% of its 20-day range.
  • PGTI is in the upper 45% of its 5-day range.
  • PGTI 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 PGTI:

PGT, Inc. manufactures and supplies residential impact-resistant windows and doors in the Southeastern United States, the Gulf Coast, Coastal mid-Atlantic, the Caribbean, Central America, and Canada. PGTI has a PE ratio of 34.9. Currently there are 5 analysts that rate PGT a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for PGT has been 326,600 shares per day over the past 30 days. PGT has a market cap of $553.5 million and is part of the industrial goods sector and materials & construction industry. Shares are up 19.5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates PGT as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 1.2%. Since the same quarter one year prior, revenues rose by 36.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. 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.
  • PGT INC's earnings per share declined by 45.5% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, PGT INC reported lower earnings of $0.34 versus $0.52 in the prior year. This year, the market expects an improvement in earnings ($0.60 versus $0.34).
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. In comparison to the other companies in the Building Products industry and the overall market, PGT INC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • The debt-to-equity ratio is very high at 2.62 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 3.52, which shows the ability to cover short-term cash needs.

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