Today's Strong And Under The Radar Stock: Euronet Worldwide (EEFT)

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

  • EEFT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $25.7 million.
  • EEFT is making at least a new 3-day high.
  • EEFT has a PE ratio of 33.8.
  • EEFT is mentioned 1.52 times per day on StockTwits.
  • EEFT has not yet been mentioned on StockTwits today.
  • EEFT is currently in the upper 20% of its 1-year range.
  • EEFT is in the upper 35% of its 20-day range.
  • EEFT is in the upper 45% of its 5-day range.
  • EEFT 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 EEFT:

Euronet Worldwide, Inc. provides payment and transaction processing and distribution solutions to financial institutions, retailers, service providers, and individual consumers worldwide. EEFT has a PE ratio of 33.8. Currently there are 3 analysts that rate Euronet Worldwide a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Euronet Worldwide has been 345,200 shares per day over the past 30 days. Euronet Worldwide has a market cap of $3.0 billion and is part of the services sector and diversified services industry. The stock has a beta of 2.00 and a short float of 3.1% with 2.99 days to cover. Shares are up 5.9% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Euronet Worldwide as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. 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 21.9%. Since the same quarter one year prior, revenues rose by 11.9%. 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.
  • The debt-to-equity ratio is somewhat low, currently at 0.62, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.07, which illustrates the ability to avoid short-term cash problems.
  • Compared to its closing price of one year ago, EEFT's share price has jumped by 27.15%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • EURONET WORLDWIDE INC 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. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, EURONET WORLDWIDE INC increased its bottom line by earning $1.87 versus $1.70 in the prior year. This year, the market expects an improvement in earnings ($3.00 versus $1.87).
  • The gross profit margin for EURONET WORLDWIDE INC is rather low; currently it is at 21.10%. Regardless of EEFT's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, EEFT's net profit margin of 1.82% is significantly lower than the industry average.

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